Strategic Report andIFRS Financial Statements

Year Ended November 30, 2015

The Annual Report of Carnival plc comprises the Strategic Report and Carnival plc consolidated andcompany IFRS Financial Statements contained herein, together with certain parts of the Proxy Statement(including its Annexes), dated February 19, 2016.

The Carnival plc consolidated IFRS Financial Statements, which are required to satisfy reportingrequirements of the Companies Act 2006, incorporate the results of Carnival plc and its subsidiaries and,accordingly, do not include the IFRS consolidated results and financial position of Carnival Corporationand its subsidiaries. However, the Directors consider that, within the Carnival Corporation and Carnivalplc dual listed company (“DLC”) arrangement, the most appropriate presentation of Carnival plc’s resultsand financial position is by reference to the Carnival Corporation & plc U.S. GAAP consolidated financialstatements (“DLC Financial Statements”). The DLC Financial Statements are included in the CarnivalCorporation & plc 2015 Annual Report (“DLC Annual Report”), which is prepared to satisfy U.S.reporting requirements. Accordingly, the DLC Annual Report (containing the DLC Financial Statements)is included in Annex 1 to the Carnival plc Annual Report.

In order to obtain a better understanding of the Carnival Corporation & plc business, financial condition andresults of operations, the Carnival plc stakeholders should read the items referenced below included in the ProxyStatement, Annex 1 and Carnival Corporation & plc joint Annual Report on Form 10-K (“Form 10-K”), inaddition to the Carnival plc Strategic Report and IFRS Financial Statements contained herein.

The locations where the Carnival plc Annual Report Documents and Other Information can be found are as follows:

CARNIVAL PLC ANNUAL REPORT DOCUMENTS LOCATIONS PAGE NO.

Strategic ReportChief Executive Officer’s Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 1 – 3Business Overview – Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 4Vision, Goals and Related Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 4Global Cruise Industry – Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 6Favorable Characteristics of the Global Cruise Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 6Passenger Capacity and Cruise Guests Carried . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 8Our Global Cruise Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 9Segment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 9Ships Under Contract for Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 10Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 11 – 15Principal Source Geographic Areas, Cruise Programs, Cruise Pricing and Payment

Terms, Seasonality, Onboard and Other Revenues, Marketing Activities and SalesRelationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 16 – 19

Employees (including diversity) and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 19 – 20Information Technology, Supply Chain and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 20 – 22Cruise Ports and Destination Developments and Principal Joint Ventures . . . . . . . . . . . . Strategic Report 22 – 23Sustainability (including Greenhouse Gas Emissions and Human Rights) . . . . . . . . . . . . Strategic Report 23 – 25Governmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 25 – 31Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 31 – 33Trademarks and Other Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 33Competition and Industry and Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 33 – 34Business Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 34 – 53Internal Control and Risk Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 54 – 55Risk Management and/or Mitigation of Principal Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 56 – 66Going Concern Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 66Viability Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 66 – 67Repurchase Authorizations and Stock Swap Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Report 67 – 69Carnival plc IFRS Financial Statements for the year ended

November 30, 2015Carnival plc IFRS Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carnival plc Financial

Statements 70 – 116PricewaterhouseCoopers LLP Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . Carnival plc Financial

Statements 117 – 124Additional DocumentsDirector Independence and Related Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proxy Statement 27 – 29Carnival plc Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proxy Statement –

Annex A A-1 – A-9Carnival plc Directors’ Remuneration Report – Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proxy Statement 35 – 55Carnival plc Directors’ Remuneration Report – Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proxy Statement –

Annex B B-1 – B-13Carnival plc Corporate Governance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proxy Statement –

Annex C C-1 – C-12OTHER INFORMATION

DLC Annual ReportDLC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 6 – 37Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 64 – 65Market Price for Common Stock and Ordinary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 66Stock Performance Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 67 – 68Selected Quarterly Financial Data (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 69 – 70Corporate and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1 71

OtherOther Non-Principal Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Form 10-K 38 – 43Properties, Legal Proceedings, Executive Officers and Dividends . . . . . . . . . . . . . . . . . . . . Form 10-K 43 – 44

The Notice of Annual Meetings and Proxy Statement, dated February 19, 2016 (“Proxy Statement”) andForm 10-K are not set forth within this document, but are available for viewing at www.carnivalcorp.com orwww.carnivalplc.com. The Carnival plc IFRS Financial Statements have been submitted to the National StorageMechanism and are available for inspection at www.morningstar.co.uk/uk/NSM and will be included in theAnnual Meeting materials available to the Carnival plc shareholders.

Strategic Report

The Directors consider that, within the DLC arrangement, the most appropriate presentation of Carnival plc’sbusiness strategy is by reference to the consolidated strategy of Carnival Corporation & plc. Accordingly, thisStrategic Report presents the required strategy and business review for the combined group in order to satisfyreporting requirements of the Companies Act 2006.

Dear Shareholders,

2015 was a very strong year for our company. We accelerated progress toward our goal of delivering a double-digit return on our investment with earnings that were over 40 percent higher than 2014 – and that was on top ofnearly 25 percent growth in 2013. We achieved over 4 percent higher revenue yields while our ongoing efforts toleverage our industry-leading scale helped to contain costs. Our adjusted earnings exceeded $2 billion (U.S.GAAP earnings of $1.8 billion). Record cash from operations topped $4 billion which was more than enough tofund our capital commitments and still return in excess of $1 billion to shareholders through a 20 percentincrease in the annual dividend and the ongoing repurchase of Carnival stock.

These strong results were a tribute to the outstanding efforts of our 120,000 shipboard and shoreside teammembers who create exceptional vacation experiences for nearly 11 million guests annually, along with the vitalsupport of our travel agent partners around the globe. Their combined efforts enabled us to overcome a variety ofobstacles in 2015 and to exceed the high-end of the full-year guidance we provided at the beginning of the year.These obstacles included macroeconomic and geopolitical challenges, and the usual weather and other one-offevents as well as a $0.10 per share drag from fuel prices and currency fluctuations compared to our earlierguidance.

We enjoyed strong performance on both sides of the Atlantic, particularly in North America. In fact, some of ourbrands have reached the double-digit return threshold already, including our flagship brand Carnival CruiseLine,. We are very proud of the Carnival Cruise Line team, which has worked so hard and so effectively toaccelerate the brand’s return to double-digits.

THE PATH TO DOUBLE-DIGIT RETURNS

Looking ahead, we are working hard to deliver double-digit return on our investment across the entirecorporation through our ongoing efforts to drive demand in excess of measured capacity growth and to capturethe inherent value of our industry-leading scale.

Measured Capacity Growth

We remain focused on maintaining measured capacity growth by delivering innovative, more efficient ships,while at the same time removing less efficient vessels from our fleet.

During the year, progress continued on our fleet-enhancement program as we finalized agreements for eight newcruise ships for delivery between 2018 and 2020 as part of our strategic partnership with Fincantieri in Italy andMeyer Werft in Germany and Finland.

These new ships will be among the most efficient we have ever built and will significantly enhance the returnprofile of our entire fleet. Several of these next-generation ships will pioneer a new era in the use of sustainablefuels through our “green cruising” design represented by the first cruise ships to be powered at sea and in port byliquefied natural gas, considered the world’s cleanest burning fossil fuel. These ships will also introduce a host ofinnovative guest experiences that we will announce in the coming months.

We are especially excited about our new ship deliveries in 2016, including AIDAprima, Carnival Vista, HollandAmerica Koningsdam and Seabourn Encore. Among the innovative features designed to further complement theguest experience unique to each brand, these new additions bring to the fleet an outdoor ice rink, a lazy river ride,the first ship-top open-air cycling skyride, the first IMAX theatre at sea and Blend, the first purpose-builtpersonalized shipboard wine-blending venue. We expect each ship delivery to help drive demand well in excessof our planned capacity growth.

Even with these four new ships, our capacity growth in North America and Europe will be less than 2 percent in2016. As anticipated, our overall 3.5 percent capacity growth will again be weighted toward Asia Pacific as wetransfer capacity to meet increasing demand in that region.

Accelerating Demand

I am very proud of our teams’ many accomplishments last year. Those efforts included our multi-facetedcampaign built around the 2015 Super Bowl, which generated more than 10 billion positive media impressions

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during the height of wave season; P&O Cruises’ delivery of Britannia, the largest ship ever built specifically forBritish guests and named by Her Majesty the Queen; Princess Cruises’ 50th anniversary celebration, whichreunited the original cast of “The Love Boat” television series, and featured an award-winning float in the RoseParade; Cunard’s 175th anniversary salute to Liverpool where the three Queens – Elizabeth, Victoria and QueenMary 2 – captivated 1.3 million onlookers in what may have been the largest attendance at a single day maritimeevent in history; and, most recently, our historic five-ship event in Sydney Harbor for P&O Cruises (Australia).

These well-crafted opportunities showcase our brands, increase consumer awareness and bolster considerationfor a cruise vacation. In fact, our positive media impressions are up three-fold in just two years.

In 2015, we made significant progress on many other initiatives designed to achieve consistent revenue yieldimprovement by creating demand that surpasses supply.

Of course, the best way to increase demand is to continue to exceed guest expectations. One way to accomplishthat is to bring the best specialty restaurants and celebrity chef–designed menus to sea. Our growing list ofrenowned chefs includes Thomas Keller, Australian chef Curtis Stone and chocolatier Norman Love, joiningMarco Pierre White, Guy Fieri and David Burke, among others.

We continue to enhance our entertainment offerings across our brands with the addition of B.B. King’s BluesClub, the live interactive music experience Billboard Onboard, The Voice of the Ocean, Lincoln Center Stageand new productions by Stephen Schwartz, award-winning composer of “Wicked,” along with a host oftechnological and programming innovations.

The diversity of great entertainers aboard our ships keeps growing with headliners like country music superstarCarrie Underwood, folk legends Crosby, Stills and Nash; jazz star Herbie Hancock; and even the Grinch, throughCarnival Cruise Line’s Seuss at Sea program. And, to give consumers yet another reason to take a cruise, we willhost our first Fashion Week at sea in 2016.

These, along with fresh retail and gaming options, are all designed to offer guests even more of what they wantand in turn drive higher onboard revenue.

Our focus is on consistently exceeding guest expectations and creating lifelong advocates. Customer feedbackindicates that we are continuing to deliver on our guest experience, and the intent to repeat is very strong acrossour brands.

New Market Opportunities

We reinforced our leadership position in the burgeoning China cruise region with the successful introduction of afourth ship in 2015. We are well positioned in 2016 with two more year-round ships – one each for the CostaCruises and Princess Cruises brands.

We expect to bolster our growth in China for years to come. Beyond 2016, Princess Cruises’ Majestic Princess,the first ship built specifically for Chinese guests and designed to stimulate consumer demand, will enter Chinaalong with both our Carnival Cruise Line and AIDA brands. Entering China with multiple brands enables us togrow our presence faster and achieve deeper penetration by providing cruise experiences aimed at differentiatedsegments. In addition, we recently signed a joint venture with the China State Shipbuilding Corporation and theChina Investment Corporation to further our growth in this region.

We are well positioned to capitalize on the growing demand for international travel among Chinese consumersfollowing the recent easing of travel restrictions coupled with a growing upper middle class. Chinese outboundtravelers, already estimated at 135 million strong, are expected to grow to 200 million by 2020. Over time we areconfident that China will rank among the largest source regions for cruises.

While today China represents just 5 percent of our global capacity, we expect it to continue to be an expansivegrowth region for us. By shifting capacity growth from North America and Europe to the fast growing Chinaregion, we are further fostering combined revenue yield growth.

Working Together to Unlock our Potential

Our team is totally engaged in capturing the full benefit of the latent opportunity inherent in our industry-leadingscale – in both driving revenues and containing costs.

The more than 5 percent onboard revenue growth achieved in 2015 is an affirmation of the inherent power ofharnessing our collective efforts as we embrace a fundamental behavioral change through communicating,collaborating and coordinating across our 10 world-leading brands.

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Improved coordination among our brands has also contributed to revenue yield improvements, and we havecompleted the design phase of a common revenue management system across a number of our brands.

Significant progress was also made delivering cost savings in 2015 in a variety of procurement areas includingair travel, food and hotel supplies. We have identified additional opportunities to leverage our scale to reducecosts while enhancing the guest experience in 2016 and beyond. These efforts will deliver a cumulative total costsavings of $170 million since we began the conversation just over two years ago and will continue to be rolledout over time and help to offset inflation.

Sustainable Operations

Our reputation and success depend on having sustainable and transparent operations. We continually strive toensure cruising is the most enjoyable vacation experience for our guests. We fulfill this commitment by keepingguests and crew members safe, protecting the environment, developing our workforce, strengthening ourstakeholder relations, enhancing the port communities our ships visit and maintaining our financial strength. Wealso strive to be a responsible global corporate citizen and to be a company that people want to work for.

We continue to make progress on many fronts in our sustainability journey and we have expanded our corporategoals beyond our carbon emissions reduction goal to develop 10 new sustainability goals. These goals arefocused on further reducing our environmental footprint by 2020, enhancing the health, safety and security of ourguests and crew members, and ensuring sustainable business practices across our brands and business partners.

Developing and implementing advancements in technology is also an important component of our sustainabilitystrategy. We continue to drive innovation and technological breakthroughs within the cruise and maritimeindustries. We have taken the lead on developing solutions to meet the operational parameters of new fuel-emission regulations and have embarked on a process of installing new exhaust gas cleaning systems on ourships.

In a further effort to have a positive impact, we have introduced our newest brand Fathom, which is pioneering anew travel category we call impact travel. The Fathom approach incorporates mindful, purpose-driven activitiesand programs that enable guests to have a real, sustainable impact on the communities we visit, and a uniquelyrewarding experience.

DELIVERING ALONG THE PATH

Growth is the result of a combination of well-executed business plans and innovation that makes a difference.Our efforts in China, our new ship platforms, our ongoing brand innovations and our investments in the travelexperience of the future are all building blocks. We have much more to do to keep the momentum going in 2016and beyond.

While we briefly celebrate 2015 – an overall very good year for our corporation and our shareholders – weremain focused on our primary objective. We have a clear strategy to deliver double-digit return on investment inthe next two to three years.

Thank you for your confidence and your shared vision of building upon the great legacy that is CarnivalCorporation & plc as we continue to deliver the world’s greatest holiday experiences.

Arnold W. DonaldPresident and Chief Executive OfficerFebruary 19, 2016

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2. Business.

A. Overview

I. Summary

Carnival Corporation was incorporated in Panama in 1972 and Carnival plc was incorporated in England andWales in 2000. Carnival Corporation and Carnival plc operate a DLC, whereby the businesses of CarnivalCorporation and Carnival plc are combined through a number of contracts and through provisions in CarnivalCorporation’s Articles of Incorporation and By-Laws and Carnival plc’s Articles of Association. The twocompanies operate as if they are a single economic enterprise with a single senior executive management teamand identical Boards of Directors, but each has retained its separate legal identity. Carnival Corporation andCarnival plc are both public companies with separate stock exchange listings and their own shareholders. SeeNote 3, “DLC Arrangement” of the DLC Financial Statements, which are included in Annex 1, but do not formpart of these Carnival plc financial statements. Together with their consolidated subsidiaries, CarnivalCorporation and Carnival plc are referred to collectively within this Strategic Report as “Carnival Corporation &plc,” “our,” “us” and “we.”

We are the largest leisure travel company in the world, and among the most profitable and financially strong witha market capitalization of over $35 billion at February 19, 2016. We are also the largest cruise company havingcarried 47% of global cruise guests in 2015 and a leading provider of vacations to all major cruise destinationsthroughout the world (see Item 2. Business. C. “Our Global Cruise Business – Cruise Programs”). We operate 99cruise ships within a portfolio of ten leading global, regional and national cruise brands that sell tailored cruiseproducts, services and vacation experiences in all the world’s most important vacation geographic areas. Webelieve having global and regional brands that are serving multiple countries and national brands that are tailoredto serve individual countries provides us with a unique advantage to compete within the entire travel and leisuremarket for consumers’ discretionary vacation spending. The descriptions of the principal vacation geographicareas where we source substantially all of our guests and our brands that market primarily to these guests arediscussed in Item 2. Business. C. “Our Global Cruise Business – Principal Source Geographic Areas and CruiseBrands.”

II. Vision, Goals and Related Strategies

Our vision is to deliver unmatched joyful vacation experiences and breakthrough total shareholder returns byexceeding guest expectations and achieving the full benefits inherent in our scale. We believe our portfolio ofglobal, regional and national brands is instrumental to us achieving our vision and maintaining our cruiseindustry leadership positions, which includes having a leading cruise brand selling in each of our primary sourcegeographic areas targeting specific guest segments. Our primary financial goals are to profitably grow our cruisebusiness and increase our return on invested capital, reaching double digit returns in the next two to three years,while maintaining a strong balance sheet. Our ability to generate significant operating cash flows allows us tointernally fund our capital investments. As we drive toward double digit returns with increasing operating cashflows, we are committed to returning free cash flows to our shareholders in the form of dividends and/or sharebuybacks. In 2015, we increased our quarterly dividend by 20% to $0.30 per share from $0.25 per share andrepurchased $276 million of our shares. In addition, we are committed to maintaining our strong investmentgrade credit ratings.

To reach our primary financial goals, we continue to implement initiatives to create additional demand for ourbrands, ultimately leading to higher revenue yields. We believe measured capacity growth further drives higherrevenue yields. We will continue to identify opportunities to enhance our cruise products and services andoptimize our cost structure while preserving the unique identities of our individual brands. We have madesignificant investments to gain insight into our guests’ decision making by evaluating data included in our globaldatabase of guests to identify vacationers’ needs enabling us to further grow our share of their vacation spend.We have also implemented strategies to grow demand by increasing consumer awareness and consideration ofour cruise brands and the global cruise industry through coordinated media communication, expanded trade-showpresence and advertising.

Furthermore, we continue to identify and implement new strategies and tactics to strengthen our cruise ticketrevenue management processes and systems across our portfolio of brands, such as optimizing our pricing

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methodologies and improving our pricing models. In addition, we are in the process of developing a state-of-the-art revenue management system that will ultimately enable our brands to further optimize pricing and inventory.We are also implementing new initiatives to better coordinate and optimize our brands’ global deploymentstrategies to maximize guest satisfaction and itinerary profits. We have tools and are implementing big dataanalytic solutions that will continue to enable us to perform customer segmentation analyses, evaluate our guests’decision making process and identify new growth opportunities to expand our customer base. We are alsoimplementing initiatives to strengthen our onboard revenue programs.

We believe that we have significant opportunities to continue to grow our presence in China due to its large andgrowing middle-class population and expansion of their international tourism. It is estimated that Chinese cruisedemand will increase to over 4.0 million annual cruisers by 2020. The Chinese government has expressed astrong desire to transform China into a leading global cruise region and is making substantial investments incruise-related infrastructure. As we execute our strategy to accelerate growth in China, we have the benefit ofnine years of local experience to help guide our expansion and enhance our cruise products and services to makethem even more attractive to our Chinese guests.

With 99 ships and more than 10.8 million guests in 2015, we have the scale to optimize our structure by utilizingour combined purchasing volumes and common technologies as well as implementing cross-brand initiativesaimed at cost containment. We have established global leadership positions for communications, guestexperience, maritime, procurement, revenue management and strategy to increase collaboration andcommunication across our brands and help coordinate our global efforts and initiatives. In addition, we areintegrating certain back office functions to achieve the full benefits of our scale.

We are building new, innovative, purpose-built ships that are larger with a greater number of balconies, morefuel efficient and have a wider range of onboard amenities and features. These ships enable us to better competewith other vacation options for consumers’ vacation spend while achieving greater economies of scale resultingin improving returns on invested capital. As of February 19, 2016, we have a total of 17 cruise ships scheduled tobe delivered between 2016 and 2020. Some of these ships will replace existing capacity as less efficient shipsexit our fleet. Since 2006, we have removed 17 ships from our fleet and will remove one more ship in March2016. We have a disciplined, measured approach to capacity growth so that we achieve an optimal balance ofsupply and demand to maximize our profitability. We continue to make substantial investments in our existingship enhancement programs to improve our onboard product offerings and enrich our guests’ vacationexperiences.

Our vision is based on four key pillars that are linked to each other:

• Health, environment, safety, security and sustainability,• Guests,• Employees and• Shareholders and other stakeholders

Health, Environment, Safety, Security and Sustainability

We consider health, environment, safety, security and sustainability matters to be core guiding principles. Ouruncompromising commitment to the safety and comfort of our guests and crew is paramount to the success of ourbusiness. We are committed to operating a safe and reliable fleet and protecting the health, safety and security ofour guests, employees and all others working on our behalf, thereby promoting an organization that is free ofinjuries, illness and loss. We continue to focus on further enhancing the safety measures onboard all of our ships.We are also devoted to protecting the environment in which our vessels sail and the communities in which weoperate. We are dedicated to fully complying with, or exceeding, all relevant legal and statutory requirementsrelated to health, environment, safety, security and sustainability throughout our business. See Item 2. Business.C. “Our Global Cruise Business” for further information.

Guests

Our goal is to consistently exceed our guests’ expectations while providing them with a wide variety ofexceptional vacation experiences. We believe that we can achieve this goal by continually focusing our efforts onhelping our guests choose the cruise brand that will meet their unique needs and desires, improving their overall

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vacation experiences and building state-of-the-art ships with innovative onboard offerings and unequaled guestservices. We are continuing to work on the next generation of innovative guest experiences so as to ensure wewill be consistently exceeding our guest expectations.

Employees

Our goal is to recruit, develop and retain the finest shipboard and shoreside employees. A team of highlymotivated and engaged employees is key to delivering vacation experiences that exceed our guests’ expectations.Understanding the critical skills that are needed for outstanding performance is crucial in order to hire and trainour crew and shoreside personnel. We believe in listening to our employees’ perspectives and ideas and useemployee feedback tools to monitor our progress in this area. We are a diverse organization and value andsupport our talented and diverse employee base. We also are committed to employing people from around theworld and hiring them based on the quality of their experience, skills, education and character, without regard fortheir identification with any group or classification of people.

Shareholders and Other Stakeholders

We value the relationships we have with our shareholders and other stakeholders, including travel agents,communities, regulatory bodies, media, creditors, insurers, shipbuilders, governments and suppliers. We believethat engaging stakeholders in a mutually beneficial manner is critical to our long-term success and key for us torealize our vision. As part of this effort, we believe we must continue to be an outstanding corporate citizen in thecommunities in which we operate. Our brands work to meet or exceed their economic, environmental, ethical andlegal responsibilities.

Strong relationships with our travel agents are especially vital to our success. We continue to strengthen ourrelationship with the travel agent community by increasing our communication and outreach, implementingchanges based on travel agent feedback and improving our educational programs to assist agents in stimulatingcruise demand.

B. Global Cruise Industry

I. Overview

The multi-night global cruise industry has grown significantly but still remains a relatively small part of thewider global vacation industry, which includes a large variety of land-based vacation alternatives around theworld. Within the global vacation industry, cruise companies compete for the discretionary income spent byvacationers. A 2015 Nielsen Global Consumer Confidence Survey found that after providing for savings andliving expenses, the number one global spending priority is for vacations. As a result of these and other favorablecruise industry characteristics, we believe that the global cruise industry has the opportunity to capture a greatershare of consumers’ spending.

Cruising offers a broad range of products and services to suit vacationing guests of many ages, backgrounds andinterests. Cruise brands can be broadly classified as offering contemporary, premium and luxury cruiseexperiences. The contemporary experience typically includes cruises that last seven days or less, have a morecasual ambiance and are less expensive than premium or luxury cruises. The premium experience typicallyincludes cruises that last from seven to 14 days and appeal to those who are more affluent and older. Premiumcruises emphasize quality, comfort, style and more destination-focused itineraries, and the average pricing isnormally higher than contemporary cruises. The luxury experience is usually characterized by smaller vesselsize, very high standards of accommodation and service, higher prices and exotic itineraries to ports that areinaccessible to larger ships. We have product and service offerings in each of these three broad classifications.Notwithstanding these classifications, there generally is overlap and competition among all cruise products andservices.

II. Favorable Characteristics of the Global Cruise Industry

a. Exceptional Value Proposition

We believe that the cost of a cruise vacation represents an exceptional value in comparison to alternative land-based vacations. Cruising provides many relatively unique benefits, such as transportation to various destinations

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while also providing accommodations, a generous diversity of food choices and a selection of daily entertainmentoptions for one all-inclusive, competitive price. To make cruising even more cost effective and more easilyaccessible to vacationers, the cruise industry typically offers a number of drive-to home ports, which enablesmany cruise guests to reduce their overall vacation costs by eliminating or reducing air and other transportationcosts.

b. Relatively Low Penetration Levels

Based on industry data, the 2015 annual penetration rates when computed based on the number of annual cruiseguests as a percentage of the total population are as follows (a):

• 4.0% for Australia and New Zealand,• 3.4% for North America (b),• 2.7% for the United Kingdom (“UK”) and• 1.9% for continental Europe (c).

(a) 2015 annual penetration rates were computed based on the historical number of cruise guests carriedfor at least two consecutive nights obtained from G.P. Wild (International Limited) (“G.P. Wild”), anindependent cruise research company and internal estimates.

(b) For the purpose of the penetration rate calculation, North America is comprised of the United Statesof America (“U.S.”) and Canada.

(c) For the purpose of the penetration rate calculation, continental Europe is comprised of Germany, Italy,France, Spain and Portugal.

Cruising in China is in the early stages of development. Over the past decade China has been, by far, the world’sfastest growing tourism source area. With a growing middle class, almost 135 million Chinese tourists areexpected to have traveled abroad in 2015 and it is expected to grow to 200 million by 2020. About 90% ofChinese outbound travel happens in Asia, with most destinations reachable by sea. We believe the cruise segmentof the Chinese vacation region has significant long-term growth potential given its early stage of developmentwith healthy demand from a large and growing middle-class population, the easing of travel restrictions andincreasing support from the Chinese government.

c. Wide Appeal

Cruising appeals to a broad range of ages and income levels. Cruising provides something for every generation,from kids’ clubs to an array of onboard entertainment designed to appeal to teens and adults. Cruising also offerstransportation to a variety of destinations and a diverse range of ship types and sizes, as well as price points, toattract guests with varying tastes and from most income levels. To encourage first-time and repeat cruisers andbetter compete with other vacation alternatives the cruise industry has done, among other things, the following:

• Expanded entertainment options,• Provided flexible dining options including

open-seating dining,• Added branded specialty restaurants, bars

and cafés,• Enhanced internet and communication

capabilities,

• Offered shorter cruises from a variety ofhome ports,

• Offered money-back guarantees,• Added more shipboard attractions,• Refocused marketing efforts,• Enhanced training of travel agents and• Collaborated with well-known brands to

attract more families.

d. Positive Demand Trends

The average age of populations in established cruise regions is increasing. The average age of a cruise guest,which varies by brand, ranges from approximately 40 years to 60 years in established cruise regions. Between2015 and 2025, the number of people in the cruise business’ primary age group of 45 years and older is expectedto grow by 18 million, or 12%, in the U.S. and Canada, 13 million, or 9%, in the major Western Europeancountries and 1.5 million, or 17%, in Australia.

The baby boomer generation, or those born between 1946 and 1964, is the most active older population group inhistory. The youngest in this group, who are in their fifties, are typically experiencing their peak earning years.

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Some of the oldest in this group, who are in their late sixties, are defying traditional stereotypes by continuing towork, having more active lifestyles and enjoying multi-generational cruising.

The fastest growing segment of the vacation industry is the millennial generation, or those born between 1980and 2000. The millennial generation has surpassed the size of the baby boomers generation and now representsthe largest generation size in history. The millennial generation has a strong desire for travel and sharedexperiences and should continue to offer growth to the vacation industry, especially as they evolve into morefrequent travelers.

Furthermore, many emerging international regions are experiencing growing economies and a rapid growth inmiddle-class consumers. As their earnings power and disposable income increase, these middle-class consumersare becoming more eager to purchase entertainment, travel and other discretionary products and services. Thisdemand growth provides the cruise industry the opportunity to expand its reach in these regions.

We believe the cruise industry is well-positioned to take advantage of these positive demand trends.

e. Ship Mobility

The mobility of cruise ships enables cruise companies to move their vessels between regions in order tomaximize profitability and to meet changing demand. For example, brands can change itineraries over time inorder to cater to guest tastes or as general economic or geopolitical conditions warrant. In addition, cruisecompanies have the flexibility to reposition some of their capacity to areas with growing demand, such as China.We believe that this unique ability to move ships provides the cruise industry with a competitive advantagecompared to other land-based vacation alternatives.

f. High Guest Satisfaction Rates

Cruise guests tend to rate their overall satisfaction with a cruise vacation higher than comparable land-basedhotel and resort vacations. According to industry surveys, the cruise experience consistently exceeds expectationsof repeat and first-time cruisers on a wide range of important vacation attributes, such as value and service levels.Cruising continues to receive high guest satisfaction rates because of the unique vacation experiences it offers,including visiting multiple destinations without having to pack and unpack, all-inclusive product offerings andstate-of-the-art cruise ships with entertainment, relaxation and fun, all at an outstanding value.

g. Favorable Supply Versus Demand Balance

The cruise industry continues to maintain a disciplined, measured rate of growth in established source areas, suchas North America and Western Europe, and is investing in emerging source areas, such as China, where itbelieves it has greater growth opportunities. In addition, less efficient cruise ships will continue to be retired fromservice as they reach the end of their economic lives, no longer provide guests with the vacation experiences thatthey desire or do not provide sufficient cash flows. We believe this favorable supply versus demand balance willcontinue to have a positive impact on the cruise industry’s ability to grow profitably.

III. Passenger Capacity and Cruise Guests Carried

The weighted-average passenger (lower berth) capacities for the global cruise industry and for us are as follows(a):

YearGlobal

Cruise IndustryCarnival

Corporation & plc

2011 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387,000 195,0002012 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399,000 200,0002013 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415,000 205,0002014 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,000 210,0002015 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445,000 215,0002016 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 221,0002017 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494,000 230,0002018 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521,000 235,000

(a) In accordance with cruise industry practice, passenger capacity is calculated based on the assumption of twopassengers per cabin even though some cabins can accommodate three or more passengers. For contracted

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capacity increases, see Item 2. Business. C. “Our Global Cruise Business – Ships Under Contract forConstruction” below.

(b) Global Cruise Industry amounts were obtained from our internal estimates and data provided by the CruiseLine Industry Association (“CLIA”), which is a non-profit marketing and training organization formed topromote cruising.

(c) Our estimates of future passenger capacity do not include any assumptions related to unannounced shipwithdrawals and, accordingly, our estimates could indicate a higher growth in passenger capacity than willactually occur.

The number of cruise guests carried by the global cruise industry and by us are as follows:

Global Cruise Industry Carnival Corporation & plc

Year (a) North America

Europe,Australia, Asia

and Other Total Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . 11,561,000 8,959,000 20,520,000 9,559,0002012 . . . . . . . . . . . . . . . . . . . . . . . . . 11,767,000 9,046,000 20,813,000 9,829,0002013 . . . . . . . . . . . . . . . . . . . . . . . . . 11,820,000 9,523,000 21,343,000 10,061,0002014 . . . . . . . . . . . . . . . . . . . . . . . . . 12,281,000 9,759,000 22,040,000 10,566,0002015 (b) . . . . . . . . . . . . . . . . . . . . . . 12,361,000 10,612,000 22,973,000 10,837,000

(a) The estimates of the total guests carried for 2011 through 2014 were obtained from G.P. Wild and are basedupon where the guests were sourced and not the cruise brands on which they sailed.

(b) The estimates of the total guests carried for 2015 are based on internally developed global guests’ growthrates.

C. Our Global Cruise Business

I. Segment Information

Each of our nine leading global, regional and national cruise brands sailing in 2015 is an operating segment thatwe aggregate into either the (1) North America or (2) Europe, Australia & Asia (“EAA”) reportable cruisesegments based on the similarity of their economic and other characteristics.

As of February 19, 2016, our cruise brands’ summary information is as follows:

Cruise BrandsPassengerCapacity

Percentage ofTotal Capacity

Number ofCruise Ships

North AmericaCarnival Cruise Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,366 29% 24Princess Cruises (“Princess”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,340 20 18Holland America Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,069 10 13Seabourn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374 1 3

North America Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,149 60 58

EAACosta Cruises (“Costa”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,924 17 15AIDA Cruises (“AIDA”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,656 9 10P&O Cruises (UK) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,383 8 8P&O Cruises (Australia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,324 3 5Cunard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,694 3 3

EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,981 40 41

216,130 100% 99

We also have a Cruise Support segment that includes our cruise port and related facilities located in Cozumel,Mexico; Grand Turk, Turks and Caicos Islands; Puerto Plata, Dominican Republic; and Roatán, Honduras, whichare operated for the benefit of our cruise brands. Cruise Support also includes other services that are provided forthe benefit of all our cruise brands and Fathom’s pre-launch selling, general and administrative expenses.

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In addition to our cruise operations, we own Holland America Princess Alaska Tours, the leading tour companyin Alaska and the Canadian Yukon, which complements our Alaska cruise operations. Our tour company ownsand operates 11 hotels or lodges, over 300 motorcoaches and 20 glass-domed railcars and is the eighth largestmotorcoach company in North America. This tour company and three cruise ships, the former Costa Celebration,Costa Europa and Grand Holiday, which we own and charter-out under long-term leases, comprise our Tour andOther segment as of February 19, 2016.

See Note 2, “Segment Information” to the Carnival plc financial statements for additional segment andgeographic information.

II. Ships Under Contract for Construction

As of February 19, 2016, summary information of our ships under contract for construction is as follows (a):

Cruise Brands and Ships Expected Delivery Date Passenger Capacity

North AmericaCarnival Cruise LineCarnival Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4/16 3,912Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/18 3,880

PrincessMajestic Princess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/17 3,560Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10/19 3,560

Holland America LineKoningsdam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/16 2,650Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/18 2,650

SeabournSeabourn Encore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/16 600Seabourn Ovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4/18 600

North America Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,412

EAAAIDAAIDAprima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2/16 3,286Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/17 3,286Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/18 5,210Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/20 5,210

CostaNewbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2/19 4,200Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10/19 5,176Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/20 4,200Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10/20 5,176

P&O Cruises (Australia)Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/19 4,200

EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,944

61,356

(a) Our ship construction agreements cannot be cancelled by either party without cause, and such cancellationwill subject the defaulting party to contractual liquidated damages. All of our ship construction contracts arewith Fincantieri in Italy, Meyer Werft in Germany and Finland and Mitsubishi Heavy Industries in Japan.

(b) Refer to Note 7, “Commitments” and Note 11, “Fair Value Measurements, Derivative Instruments andHedging Activities” to the DLC Financial Statements, which are included in Annex 1, but do not form part ofthese Carnival plc financial statements for additional ship commitment information.

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III. Cruise Brands

a. North America

Carnival Cruise Line is a leader in contemporary cruising and operates 24 ships designed to provide fun andexceptional vacation experiences that appeal to a wide variety of consumers, all at an outstanding value. Founded in1972, Carnival Cruise Line is one of the most recognizable brands in the cruise industry and carried over 4.5 millionguests in 2015, the most of any individual cruise brand. Carnival Cruise Line identifies their target customers as“The Spirited” or those who like to live life to the fullest, look at the glass as half full, feel comfortable in their ownskin and make their own fun. Carnival Cruise Line’s cruises have a broad appeal to families, couples, singles andseniors and carried more than 700,000 children in 2015. In January 2016, Carnival Cruise Line was voted “BestCruise Line” in USA Today’s 10 Best Readers’ Choice Awards. The line has one 3,912-passenger capacity ship,Carnival Vista, scheduled to be delivered in April 2016 and one 3,880-passenger capacity ship scheduled to bedelivered in March 2018. These newbuilds will increase existing passenger capacity by 12%.

Carnival Cruise Line offers cruises generally from three to eight days with almost all of its ships departing from15 convenient U.S. home ports located along the East, Gulf and West coasts, Puerto Rico and Hawaii. CarnivalCruise Line is the leading provider of year-round cruises in The Bahamas, the Caribbean and Mexico and alsooperates seasonal cruises in New England, Canada, Alaska, Hawaii and Europe. In addition, Carnival Cruise Linewill continue to deploy two contemporary ships from Australia, one on a year-round basis and one seasonally-based. These ships offer cruises from three to 19 days to the South Pacific Islands and New Zealand. These shipshave been refurbished to ensure they are tailored to this market, pairing the best mix of award winning Americaninnovations to suit Australian tastes. Since October 2012 when Carnival Cruise Line began its Australia cruiseprogram, the line has carried more than 350,000 guests and has proven to be extremely popular in the cruisesegment of the Australian vacation region.

The brand’s focus continues to be on enhancing its products and services with innovations that appeal to newconsumers, as well as past guests. In Spring 2016, the launch of Carnival Vista will continue the expansion of theline’s Fun Ship® 2.0 enhancement program with the introduction of new ground-breaking features as follows:

• A Thrill Theater, a multi-dimensionalexperience where seats move in multipledirections and viewers are sprayed withwater and bubbles,

• The world’s first IMAX Theater at sea,with a three-deck-high-screen,

• An onboard brewery in the RedFrog Pub,

• Expanded water park featuring the colorfulKaleid-O-Slide, the line’s first raft-ridingwater tube slide,

• Seafood Shack, a delectable New England-inspired eatery and

• SkyRide, a breakthrough suspended open-air cycling experience.

SM

Princess, whose brand name was originally made famous by the Love Boat television series, has been providingcruises since 1965 and is the world’s largest premium cruise line based on passenger capacity. In 2015, the linecelebrated its 50th anniversary with an array of celebratory activities and entertainment throughout the year tocommemorate half a century of cruising, including a reunion of the original cast of the Love Boat, and an awardwinning float in the New Years’ Rose Bowl Parade.

Princess operates a fleet of 18 ships and has two 3,560-passenger capacity ships, Majestic Princess and anothernewbuild, scheduled to be delivered in March 2017 and October 2019. Princess has one ship, Ocean Princess,that was sold in 2014 and will be leaving its fleet in March 2016. In mid-2017, Princess will transfer the2,000-passenger capacity Dawn Princess to P&O Cruises (Australia). The passenger capacity of Princess will

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increase by 10% after taking into consideration these two newbuilds, net of Ocean Princess withdrawal andDawn Princess transfer.

Princess offers 150 unique itineraries with cruises ranging from three to 20 days with longer exotic sailings from25 to 111 days, including two world cruises. Most of its cruises sailing in Asia are from three to five days andcater to its Asian guests. In the summer, Princess ships generally sail in Alaska, Europe and Asia. Princess hasbeen voted “Best Cruise Line” in Alaska by the readers of Travel Weekly in 11 of the past 12 years. In thewinter, its ships generally sail in the Caribbean, Australia, Asia and other destinations. When sailing in theCaribbean, most of Princess’ ships visit its award-winning private island in The Bahamas, Princess Cays®.

Princess’ Come Back NewTM product initiative is designed to enhance the onboard experience by providing guestswith lifelong memories and meaningful stories to share from their cruise vacation. The program includes severalnew products and services, such as three new dining options for guests as well as the SHARE specialty restaurantcrafted by celebrity chef Curtis Stone and “Chocolate Journeys” dessert experience featuring master chocolatierNorman Love. Onboard entertainment has also been enhanced by the creation of the Voice of the Ocean that ismodeled after the wildly popular international singing competition as well as four original musical productionscreated by Steven Schwartz, which includes songs written exclusively for Princess. The line continues itscollaboration with Discovery Channel to offer interactive onboard activities and shore excursions designed toentertain and delight families about the nature, wildlife and history of the regions their guest are sailing.

Holland America Line has been providing cruises for over 140 years and visits over 400 ports of call in almost100 countries and territories on all seven continents. The brand operates a fleet of 13 premium mid-sized shipsand has two 2,650-passenger capacity ships, Koningsdam and another newbuild, scheduled to be delivered inMarch 2016 and November 2018. These newbuilds will increase existing passenger capacity by 25%. In addition,the brand recently announced that it will be investing approximately $300 million for suite upgrades, such as newfurnishing, decor and amenities, retail space upgrades and enhanced ship entertainment areas on most of its ships.

Holland America Line’s cruises range from three to 35 days with longer, exotic Grand Voyages from 55 to116 days, including an annual Grand World Voyage. In the summer, Holland America Line ships generally sailin Alaska and Europe. In the winter, its ships generally sail in the Caribbean, Australia and other destinations.When sailing in the Caribbean, most of Holland America Line’s ships visit its award-winning private island inThe Bahamas, Half Moon Cay, known for its pristine beaches, diverse shore excursions, exclusive beach cabanasand family-friendly activities.

The brand recently entered into two new marquee partnerships to bring unique onboard experiences to its guests.In 2015, Holland America Line announced the launch of Lincoln Center Stage, a new onboard live music venuecreated in an exclusive partnership with the Lincoln Center for the Performing Arts, a leader in artisticprogramming and education. In addition, when Koningsdam enters service in 2016, it will feature a new liveinteractive music experience called Billboard Onboard that will debut as part of a new Music Walk complex.

Furthermore, all of Holland America Line’s ships have Culinary Arts Centers presented by Food & Winemagazine, where guests enjoy cooking demonstrations, private cooking lessons, wine tastings and lifestyleseminars, as well as cuisine from the recipes of an esteemed Culinary Council.

Seabourn, which began operations in 1988, provides ultra-luxury cruising vacations on smaller ships that focuson personalized service and guest recognition. The line’s fleet of three 458-passenger ships offer spacious all-suite accommodations, award-winning gourmet dining, and unique experiences such as the Officer on Deckculinary event, Shopping with the Chef excursions and complimentary shore events. Over the last decade,Seabourn was voted the “Best Small-Ship Cruise Line” by readers of Travel + Leisure and Condé Nast Traveler.

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In addition, Saveur named Seabourn “Finest Cruise Line Dining” in 2015 by its panel of travel experts andeditors. In 2015, Seabourn partnered with world-renowned American chef and restaurateur Thomas Keller anddeveloped an array of menus and culinary options for multiple dining venues aboard Seabourn’s fleet and willintroduce a new signature restaurant. Seabourn also pampers its guests with complimentary value-added extrassuch as Massage MomentsSM on deck and Caviar in the SurfSM beach parties. All of the Seabourn ships have aservice ratio of nearly one staff member per guest and an intimate, sociable atmosphere that has been thehallmark of the Seabourn lifestyle.

Seabourn’s ships cruise to destinations throughout the world, including Europe, Asia, the South Pacific Islands,Australia and New Zealand, the Americas and Antarctica, with cruises generally from seven to 14 days, with anumber of longer voyages. Seabourn also continues to have a multi-year agreement with the United NationsEducational Scientific and Cultural Organization to support its mission of safeguarding unique cultural andnatural features around the world and promote sustainable tourism, thus providing its guests with unique accessto, and a greater understanding of more than 150 World Heritage Sites visited by the line.

Seabourn has two new 600-passenger capacity ships, Seabourn Encore and Seabourn Ovation, scheduled fordelivery in November 2016 and April 2018. These newbuilds will almost double Seabourn’s existing passengercapacity. With the addition of these two new ships, Seabourn will have one of the youngest fleets in the ultra-luxury segment of the cruise industry.

Beginning in April 2016, Fathom, a social impact travel brand, will embark from Miami on seven-day voyagesonboard the 704-passenger capacity ship, Adonia. Fathom offers purpose driven travelers the opportunity toengage in cultural exchanges and experience people-to-people programs that will include humanitarian, cultural,artistic, faith-based and educational activities.

b. Europe, Australia & Asia

Costa has been providing cruises for 68 years and visits more than 270 ports around the world. The brandoperates a fleet of 15 contemporary ships and has two 5,176-passenger capacity ships and two 4,200-passengercapacity ships scheduled for delivery between February 2019 and October 2020. These newbuilds will increaseexisting passenger capacity by 52%.

In 2015, Costa carried 1.8 million guests sourced from around the world and is a leading cruise line in Italy,France, Spain and Asia. Costa offers a wide range of unique itineraries, with cruises generally ranging fromseven to 20 days and also has three to five day mini-cruises in the Mediterranean Sea, longer exotic sailings from20 to 30 days and two world cruises. Most of its cruises sailing in Asia are from four to five days and cater to itsAsian guests. In the summer, Costa deploys its ships in the Mediterranean Sea, Northern Europe and Asia. In thewinter, Costa deploys its ships in the Mediterranean Sea, the Caribbean, Asia, Brazil, Argentina, the ArabianGulf and the Indian Ocean. Costa is a leader in the Mediterranean where it boasts a tradition spanning close toseven decades and was the first cruise company to operate Mediterranean cruises year-round.

Costa considers itself the world’s ambassador of Italy’s finest. Its ships represent the best of Italy by offeringbeautiful Italian art, unique interior decorations with superb Italian mosaics, precious Murano chandeliers, fineItalian wines, excellent Mediterranean food selections and unique shops that carry well-known Italian fashionbrands. Costa attracts international guests due to its multi-lingual service and is considered in Europe to be a topvacation provider. Costa is also known for offering innovative itineraries that combine the excitement of newdestinations with pampering onboard service and ambiance. The spectacular Samsara spa wellness centerincludes a dedicated restaurant and cabins with direct access to the spa.

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In early 2016, Costa Diadema, its flagship, began offering its guests new dining options created by BrunoBarbieri, who has earned multiple Michelin Stars. Lastly, Costa recently announced a new communicationcampaign featuring world-renowned recording artist Shakira.

AIDA, which began operating in 1996, is the leader and most recognized cruise brand in the German cruiseindustry. Since 2007, AIDA has been our fastest growing cruise brand and has taken delivery of seven ships inthe past nine years. AIDA operates 10 premium ships featuring a resort casual atmosphere.

AIDA has four ships scheduled for delivery through 2020. One 3,286-passenger capacity ship is scheduled fordelivery in early 2016 and another sister ship in 2017. These ships are larger than AIDA’s current generation ofvessels and have advanced technological platforms featuring new energy efficient hull designs along withinnovative guest features. These ships feature several unique amenities, such as two foil-domed outside decksthat can be used year-round, the new Four Elements Activity Park with the world’s largest indoor water slide atsea, a Lazy River, where guests can drift and relax, an ice-skating rink, Lanai cabins with private winter gardens,as well as AIDA’s onboard hallmarks, such as a theater in the center of the ship’s atrium and a micro-brewery. Inaddition, AIDA has two 5,210-passenger capacity ships scheduled to be delivered in November 2018 and May2020. These newbuilds will almost double AIDA’s existing passenger capacity.

AIDA offers its guests cruises generally from three to 21 days, while visiting over 190 ports. In the summer,AIDA ships generally sail in the North Sea, the Baltic Sea, the Atlantic and the Mediterranean Sea. In the winter,AIDA ships generally sail in the Caribbean, Southeast Asia, the Arabian Gulf, Central America, the Atlantic Islesand the Mediterranean Sea.

AIDA’s current product is especially tailored for German-speaking guests and includes a German-speaking crewas well as German-style food and entertainment. AIDA’s ships include a variety of informal and formal diningoptions, including buffets, grills and exclusive restaurants. AIDA offers an exceptionally relaxed, yet active,cruising experience for all generations with an emphasis on a healthy and youthful lifestyle, choice, informality,family friendliness and activity. German consumers have voted AIDA the “Most Trusted Brand” in 2015 in aReader’s Digest poll and for the fifth time in a row AIDA has won the highly regarded Pegasus Award.

P&O Cruises (UK) is the leading and most recognized cruise brand in the UK and can trace its roots back 178 yearsto the formation of the Peninsular & Oriental Steam Navigation Company. P&O Cruises (UK) operates a fleet ofeight premium ships. Three of its ships offer holidays exclusively for adults while the other ships are well-suited forfamilies. P&O Cruises (UK)’s ships visit over 200 destinations worldwide, with cruises generally from seven to 17days, with a number of longer voyages, including two world cruises of over 100 days in 2016. In the summer,cruises generally depart from Southampton, England to the Mediterranean Sea, Scandinavia and the Baltic Sea,New England and Canada, the Atlantic Isles and the Caribbean. P&O Cruises (UK) also offers during the summerseven or 14 day Mediterranean voyages departing from Venice and Genoa, Italy. In the winter, the line generallyoffers cruises in the Caribbean, the Mediterranean, the Canary Islands and world cruises.

In March 2015, P&O Cruises (UK) launched its 3,647 passenger-capacity ship, Britannia, which increased thefleet’s capacity by 25%, and received the British Travel Awards’ “Best New Cruise Ship” designation, as votedon by more than 250,000 British consumers. Britannia was christened by Her Majesty the Queen and is thelargest cruise ship built exclusively for British guests. Britannia features new innovations for guests includingThe Cookery Club, a fully interactive culinary school in collaboration with James Martin, and new diningoptions, such as the Market Café and the Limelight Club, which combines great food with dazzlingentertainment. In addition, the ship will be the location of Battlechefs, the award-winning UK-based televisionshow that will feature celebrity chefs onboard Britannia.

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P&O Cruises (UK) delivers exceptional service, dining, exploration and entertainment uniquely tailored toBritish tastes. This is enhanced through partnerships with its “Food Heroes”, a line-up of British celebrity chefsincluding Marco Pierre White and James Martin. The line also offers themed cruises in conjunction with BBC’sStrictly Come Dancing, where professional dancers, judges and guests bring all the glamour of the ballroom tothe sea.

Cunard is globally renowned as operating the most famous ocean liners in the world and for offering legendarytravel experiences with a heritage of iconic ships and outstanding service. Cunard has a unique and distinctposition within the luxury travel market and recently received the British Travel Awards’ “Best Luxury CruiseLine” designation. The line operates three premium/luxury ships, Queen Elizabeth, Queen Mary 2 and QueenVictoria, and has one of the youngest fleets in the cruise industry. During 2016, Cunard ships, which havebetween 2,000 and 2,600-passenger capacity, will sail a variety of seasonal itineraries that are designed to appealto an internationally-sourced mix of guests with nearly 50% of guests sourced from markets outside the UK.Cunard offers cruises to destinations in Northern Europe, the Mediterranean Sea and New England and Canada,as well as their iconic transatlantic voyages on Queen Mary 2. Most of Cunard’s cruises are generally from sevento 14 days with three world cruises of over 100 days.

Cunard’s appeal is a combination of British elegance, exemplary service and sophistication. The brand sits in aunique space offering something no one else can; luxury on a grand scale. Guests enjoy a unique experience thatcelebrates the line’s British heritage including an enviable association with the British Royal Family. HerMajesty the Queen is Godmother to both Queen Elizabeth and Queen Mary 2.

In 2015, Cunard celebrated its 175th anniversary in cities around the world that climaxed in May with the firstever meeting of the three Queens in Liverpool, England. This event attracted more than 1.3 million shoresidespectators, in what may have been the largest attendance at a single day maritime event anywhere in the world.

P&O Cruises (Australia) is a leader in the Australian cruise industry with five contemporary ships and is recognizedby nine out of ten Australians as the brand synonymous with cruising. For the third consecutive year, P&O Cruises(Australia) was voted one of Australia’s “Most Trusted Cruise Operator” by Readers Digest in 2015.

P&O Cruises (Australia) sails to more South Pacific Island destinations than any other cruise line. In addition,remote idyllic ports of Papua New Guinea and a “taste” of Asia are also included in their itineraries. P&OCruises (Australia) also offers year round itineraries to Australia’s magnificent coast line and to New Zealand.Most of its cruises generally range from three to ten days.

In November 2015, P&O Cruises (Australia) took delivery of the 1,260-passenger capacity Ryndam andStatendam from Holland America Line, which were refurbished and renamed Pacific Aria and Pacific Eden. Aspart of their refurbishments, these ships have replaced the traditional cruise buffet with an international marketplace of fresh food outlets reflecting the many flavors Australians love to eat. In mid-2017, Princess will transferthe 2,000-passenger capacity Dawn Princess to P&O Cruises (Australia) who will rename her Pacific Explorer.P&O Cruises (Australia) has one 4,200-passenger capacity ship scheduled to be delivered in November 2019.

With over 80 years of cruising experience, P&O Cruises (Australia) provides a holiday experience inspired bythe modern Australian and New Zealand traveler. The onboard atmosphere is laid back with a focus on moderndesign, great food, friendly service and exciting entertainment. Australian and New Zealand travelers enjoyactive lifestyles and the line caters to that by offering numerous activities while also giving its guests flexibilityand freedom of choice during their cruises. P&O Cruises (Australia) has partnered with leading restaurateur andcelebrity chef, Luke Mangan, and created a new signature fine-dining restaurant, Salt Grill, onboard all of itsships.

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IV. Principal Source Geographic Areas

a. North America

Almost 53% of the cruise guests in the world are sourced from North America. Approximately 12.2 millionNorth America-sourced guests took multi-night cruise vacations in 2014, and we estimate that a similar numberof guests cruised in 2015. The most popular location visited by North America-sourced cruise guests in 2015 wasthe Caribbean (including The Bahamas) and other locations include the Mediterranean Sea, Alaska, NorthernEurope, Mexican Riviera, New England and Canada, Bermuda, Hawaii, the Panama Canal and other exoticlocations, such as South and Central America, the South Pacific Islands, Australia, New Zealand, China, Japan,South Korea, Vietnam, Singapore and Thailand. We serve this vacation region mainly through Carnival CruiseLine, Holland America Line, Princess, Seabourn and Cunard although some of our other brands also sourceguests from North America but to a lesser extent.

b. Continental Europe

The main countries in continental Europe for sourcing cruise guests are Germany, Italy, France and Spain.Approximately 4.8 million continental European-sourced guests took multi-night cruise vacations in 2014compared to 12.2 million North American-sourced guests. Additionally, we estimate that approximately5.0 million continental European-sourced guests cruised in 2015 and were sourced from:

Guests

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,860,000Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880,000France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620,000Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,000Rest of continental Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,170,000

5,010,000

The most popular location visited by continental European-sourced cruise guests in 2015 was the Mediterranean Seaand other locations include Atlantic Isles (including the Canary Islands and Madeira), Northern Europe (includingScandinavia), the Caribbean, Bermuda, the Arabian Gulf and the Indian Ocean, China, Japan, South Korea, SouthAmerica, New York, New England and Canada. We serve this vacation region mainly through AIDA and Costaalthough some of our other brands also source guests from continental Europe but to a lesser extent.

c. United Kingdom

Approximately 1.6 million UK-sourced guests took a multi-night cruise vacation in 2014, and we estimate that1.7 million guests cruised in 2015. The most popular location visited by UK-sourced cruise guests in 2015 werethe Mediterranean Sea, Scandinavia and the Baltic Sea, New England and Canada, the Atlantic Isles and theCaribbean. We serve this vacation region mainly through Cunard and P&O Cruises (UK) although some of ourother brands also source guests from the UK but to a lesser extent.

d. Australia

Approximately one million Australian and New Zealand guests took multi-night cruise vacations in 2014, and weestimate that 1.1 million guests cruised in 2015. The most popular location visited by Australian and NewZealand-sourced cruise guests in 2015 were Australia, New Zealand, South Pacific islands, such as NewCaledonia, Fiji, New Guinea and southeast Asia, such as Indonesia and Thailand. We serve this vacation regionmainly through P&O Cruises (Australia), Princess and Carnival Cruise Line although some of our other brandsalso source guests from Australia and New Zealand but to a lesser extent.

e. China

Approximately 700,000 Chinese guests took multi-night cruise vacations in 2014, and we estimate that1.0 million guests cruised in 2015. The most popular locations visited by Chinese-sourced guests in 2015 wereJapan and South Korea. We serve this vacation region mainly through Costa and Princess although some of ourother brands also source guests from China but to a lesser extent. We also intend to expand our brand portfolio inChina in the future.

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V. Cruise Programs

Our ships sail to all of the world’s major cruise destinations and the percentage of our passenger capacitydeployed in each of these regions is as follows:

Region 2016 2015 2014

Caribbean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31% 34% 35%Mediterranean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 16 17Europe without Mediterranean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 13 12Australia and New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 7 7Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 6 5Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 5Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 19

100% 100% 100%

VI. Cruise Pricing and Payment Terms

Each of our cruise brands publishes prices for the upcoming seasons primarily through the internet, althoughpublished materials such as brochures and direct mailings are also used. Our brands have multiple pricing levelsthat vary by cruise line, category of cabin, ship, season, duration and itinerary. Cruise prices frequently change ina dynamic pricing environment and are impacted by a number of factors, including the number of availablecabins for sale in the marketplace and the level of guest demand. Some cruise prices are increased due to higherdemand. Conversely, some cruise prices are reduced through special promotions and early booking, past guestrecognition and other programs. We are in the process of developing a state-of-the-art revenue managementsystem that will ultimately enable our brands to further optimize pricing and inventory. In addition, we areimplementing new initiatives to better coordinate and optimize our brands’ global deployment strategies tomaximize guest satisfaction and itinerary profits.

Our bookings are generally taken several months in advance of the cruise departure date. Typically, the longerthe cruise itinerary the further in advance the bookings are made. This lead time allows us to manage our pricesin relation to demand for available cabins through the use of advanced revenue management capabilities andother initiatives, with the typical strategy of marketing our ships to fill them while achieving the highest possibleoverall net revenue yields. See Item 3. Business Review -“Key Performance Non-GAAP Financial Indicators”within this Strategic Report for a discussion of net revenue yields.

The cruise ticket price typically includes the following:

• Accommodations,• Most meals, including snacks at numerous venues,• Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club, and

sun decks,• Child care and supervised youth programs,• Entertainment, such as theatrical and comedy shows, live music and nightclubs and• Access to exclusive private islands and destinations.

Our brands’ payment terms generally require that a guest pay a deposit to confirm their reservation and then paythe balance due before the departure date. Our guests are subject to a cancellation fee if they cancel their cruisewithin a pre-defined period before sailing, unless they purchase a vacation protection package for the ability toobtain a refund.

As a convenience to our guests, we offer to arrange air transportation to and from airports near the home ports ofour ships. In 2015, approximately10% of our guests purchased air transportation from us. In addition, we charteraircraft to facilitate our guests’ travel to distant locations for some of our European brands’ cruise itineraries. Wealso offer ground transfers from and to the airport near the ship’s home port as part of our transfer programs.

VII. Seasonality

Our revenues from the sale of passenger tickets are seasonal. Historically, demand for cruises has been greatestduring our third quarter, which includes the Northern Hemisphere summer months. This higher demand duringthe third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of our

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operating income is earned during this period. The seasonality of our results also increases due to ships beingtaken out-of-service for maintenance, which we schedule during non-peak demand periods. In addition,substantially all of Holland America Princess Alaska Tours’ revenue and net income is generated from Maythrough September in conjunction with the Alaska cruise season.

VIII. Onboard and Other Revenues

Onboard and other activities are provided either directly by us or by independent concessionaires, from which wereceive either a percentage of their revenues or a fee. In 2015, we earned 25% of our revenues from onboard andother revenue activities and services not included in the cruise ticket price including the following:

• Substantially all liquor and some non-alcoholicbeverage sales,

• Internet and communicationservices,

• Casino gaming, • Full service spas,• Shore excursions, • Specialty themed restaurants,• Gift shop sales, • Art sales and• Photo sales, • Laundry and dry cleaning services.

We enhance our guests’ onboard experiences and increase our onboard revenues by offering all-inclusivebeverage packages, spa packages and specialty restaurants. We are also implementing initiatives to strengthenour onboard revenue programs, such as bar and casino programs. We use various marketing and promotionaltools and are supported by point-of-sale systems permitting “cashless” transactions for the sale of these onboardand other products and services. As a convenience to our guests, all our brands allow their guests to pre-book,and in most cases, pre-pay certain of their onboard and other revenue-producing activities in advance of thecruise.

We offer a variety of shore excursions at each ship’s ports-of-call that include beach experiences, generalsightseeing, cultural tours, adventure outings and local boat rides. We typically utilize local operators whoprovide shore excursions with guides who speak the same languages as most of our shore excursion guests. Forour sailings to destinations in Alaska, shore excursions are operated by our wholly owned company, HollandAmerica Princess Alaska Tours, or provided by local independent operators. We also offer revenue-producingactivities on the private islands and port destinations that we operate that include beach bars and restaurants,water sports, cabana rentals and chair lift and surf rider attractions.

Our casinos are all owned and operated directly by us and are equipped according to the unique requirements ofour individual brands, which are driven by the ships’ itineraries and the market from which their guests aresourced. We offer a wide variety of slot and gaming machines and a diverse mix of both traditional and specialtytable games designed to meet the desires of our guests. We have also developed marketing and promotionalarrangements with land-based casino companies in order to increase the number of casino players onboardcertain of our brands. The casinos are only open when our ships are at sea in international waters or whenotherwise permitted by law.

In conjunction with our cruise vacations, many of our cruise brands sell pre-and post-cruise land packages of oneto four days that include guided tours, hotel accommodations and related transportation services. In Alaska andthe Canadian Yukon, we utilize, to a large extent, our own hotel and transportation assets. Additionally, we earnrevenues from various promotional and other programs with destination retailers, parking facilities, credit cardproviders and other destination-based incentives.

IX. Marketing Activities

Guest feedback and research support the development of our overall marketing and business strategies to drivedemand for cruises and increase the number of first-time cruisers. We measure and evaluate key drivers of guestloyalty and their satisfaction with our products and services that provide valuable insights about guests’ cruiseexperiences. We closely monitor our net promoter scores, which reflect the likelihood that our guests willrecommend our brands’ cruise products and services to friends and family. We also regularly initiate customerresearch studies among guests, travel agents, tour operators and others for input on business decisions thatenhance our cruise products and services for our guests.

With increased collaboration between our brands and access to vast databases of past guest information, we areable to perform psychographic segmentation studies that allow us to better understand our guests’ needs, wants

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and expectations. The results of these studies shape how we communicate, advertise and refine the bookingprocess, overall onboard experience, as well as post-cruise interactions. Our ability to identify the psychographicmix is a powerful differentiator, which allows us to guide guests to the right experiences with the appropriatebrands and build advocates for life.

Each of our brands has comprehensive marketing and advertising programs across diverse mediums to promotetheir products and services to vacationers and travel agents in their source areas. Each brand’s marketing activitiesare generally designed to reach a local region in the local language. We continue to expand our marketing efforts toattract new guests online by leveraging the reach and impact of digital marketing and social media. This helps uscultivate guests as advocates of our brands, ships, itineraries and onboard products and services. We also have blogshosted by ship captains, cruise and entertainment directors, executive pursers and special guests.

We continue with our multi-brand marketing initiative with print, digital, social and field marketing elementswith the goal of inspiring consumers to purchase a cruise. In addition, we have tools and are implementing bigdata analytic solutions that will continue to enable us to perform customer segmentation analyses, evaluate ourguests’ decision making processes and identify new market growth opportunities to expand our customer base.We have implemented strategies to generate new demand by targeting new cruisers who typically vacation atland-based destinations.

All of our cruise brands offer past guest recognition programs that reward repeat guests with special incentivessuch as reduced fares, gifts, onboard activity discounts, complimentary laundry and internet services, expeditedship embarkation and disembarkation and special onboard activities.

X. Sales Relationships

We sell our cruises mainly through travel agents and tour operators that serve our guests in their local regions. Theseparties typically sell cabins to individuals and groups and also charter full or partial ships. In China, we sell cruises toour Chinese-sourced guests by chartering our ships and packaging groups of cabins to travel organizations that havetravel agent licenses authorized to sell outbound travel products in China. Our individual cruise brands’ relationshipswith their travel agents are generally independent of each of our other brands. Our travel agent relationships aregenerally not exclusive and travel agents generally receive a base commission, plus the potential of additionalcommissions, including complimentary tour conductor cabins, based on the achievement of pre-defined sales volumes.During fiscal 2015, no controlled group of travel agencies accounted for 10% or more of our revenues.

Travel agents are an integral part of our long-term cruise distribution network and are critical to our success. We utilizelocal sales teams to motivate travel agents to support our products and services with competitive sales and pricingpolicies and joint marketing and advertising programs. We also employ a wide variety of educational programs,including websites, seminars and videos, to train agents on our cruise brands and their products and services.

All of our brands have internet booking engines to allow travel agents to book our cruises. We also support travelagent booking capabilities through global distribution systems. All of our cruise brands have their own consumerwebsites that provide access to information about their products and services to users and enable their guests toquickly and easily book cruises and other products and services online. These sites interface with brands’ socialnetworks, blogs and other social media sites, which allow them to develop greater contact and interaction withtheir guests before, during and after their cruise. We also employ vacation planners who support our salesinitiatives by offering our guests one-on-one cruise planning expertise and other services.

We are a customer service driven company and continue to invest in our service organization to assist travel agentsand guests before, during and after their cruise. We believe that our support systems and infrastructure are amongthe strongest in the vacation industry. Our investment in customer service includes the development of employees,processes and systems. We continually improve our systems within the reservations and customer relationshipmanagement functions, emphasizing the continuing support and training of the travel agency community.

XI. Employees

Our shipboard and shoreside employees are sourced from over 100 countries. We employ an average of 82,200crew members, including officers, onboard the 99 ships we currently operate, which excludes employees who areon a leave. Our shoreside operations have an average of 10,000 full-time and 2,400 part-time/seasonalemployees. Of our total employees, 21,000 are female and 73,600 are male. Two of the nine members of ourBoards of Directors are female and seven are male. Our 10 executive officers are male. Holland AmericaPrincess Alaska Tours significantly increases its work force during the late spring and summer months in

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connection with the Alaskan cruise season, which seasonal employees are included above. We have entered intoagreements with unions covering certain employees on our ships and in our shoreside hotel and transportationoperations. We consider our employee and union relationships to be strong. The percentages of our shipboard andshoreside employees that are represented by collective bargaining agreements are 47% and 15%, respectively.

We source our shipboard officers primarily from Italy, the UK, Holland, Germany and Norway. The remaining crewpositions are sourced from around the world, with the largest contingent from the Philippines, Indonesia and India. Weutilize a limited number of manning agencies to help locate, hire and train most of our shipboard employees.

XII. Training

Our cruise brands are committed to providing appropriate hotel and marine-related training to ensure that ourshipboard crew, including officers, have the knowledge and skills to properly perform their jobs. We have amaritime training program for shipboard officers that includes two training facilities with one located in Almere, theNetherlands, known as the Center for Simulator Maritime Training (“CSMART”), and the other located in Rostock,Germany. Our goal is to be a leader in delivering high quality professional maritime training. Participants receive amaritime training experience that fosters critical thinking, problem solving, ethical decision making and skilldevelopment. These facilities have numerous bridge and engine room simulators that are used for training. We areinvesting over $90 million to build a new CSMART training and accommodation facility that will open in mid-2016. We expect to train annually more than 6,000 shipboard officers at this expanded facility.

We have enhanced our Health, Environment, Safety & Security (“HESS”) Management System risk assessmentand management capabilities by implementing shipboard quality assurance initiatives that will further strengthenbridge and engine control room resource management training and operational performance. We have alsoestablished the European Cruise Academy in Rostock, which offers advanced training certificates in the maritimesciences primarily related to the cruise business.

We provide a diverse range of shoreside and shipboard training for our hotel staff before and after they join ourships to further enhance their skills. Specifically, we provide bar, entertainment, guest service, housekeeping,leadership, management and restaurant training. Depending on the brand, we will also provide our hotel staffwith in-depth English, German and Italian language training. All our hotel staff also undergo extensive safetytraining and, depending on their position, will pursue advanced safety certifications. We partner closely withmanning agencies to help provide this training in Manila, Philippines; Jakarta, Indonesia; and Mumbai, India.

XIII. Information Technology

With the increasing size and sophistication of cruise ships, the technologies employed to create guest experiencesand operate ships have grown ever more complex and integrated. Our global information technology model isdesigned to contribute to exceeding expectations of our guests, crew, shoreside employees and otherstakeholders. Our global technology model is focused on creating innovative platforms and solutions to createexceptional guest experiences while leveraging common technologies to drive process efficiency andeffectiveness across our portfolio of brands. In order to achieve our goals, we are focusing on applications,connectivity, cybersecurity, infrastructure and innovation. In the area of cybersecurity, we are striving to provideconsistent protection of guest, employee and company data and develop best practices and tools to combat threatsand malicious activity.

All of our brands are actively collaborating on our global information technology solutions, standards andprocesses. By aligning technology planning, infrastructure and applications, we continue to maximize thebusiness value of our information technology investments by eliminating redundancies and driving synergiesacross the brands while identifying and leveraging best practices and establishing common standards.

XIV. Supply Chain

Our largest non-payroll operating expenditures are for fuel, food and beverages, repairs and maintenanceincluding dry-docking, travel agency services, port facility utilization, advertising and marketing, transportation

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services, hotel and restaurant products and supplies, entertainment expenses and credit card fees. Our largestcapital investments are for the construction of new ships and improvements to existing ships, including exhaustgas cleaning systems (“EGCSs”) and energy efficiency investments.

Although we utilize a select number of suppliers for most of our food and beverages, communication services, airtransportation services and hotel and restaurant products and supplies, most of these products and services areavailable from multiple sources at competitive prices. The use of a select number of suppliers enables us to,among other things, obtain volume discounts. We purchase fuel and port facility services at some of our ports-of-call from a limited number of maritime suppliers. Almost 54% of our fuel purchases are provided by sevensuppliers.

Our global procurement team continues to implement cost savings strategic initiatives including:

• Reviewing our processes for purchasing food, beverages, hotel supplies, restaurant products andtechnical spares to identify synergistic opportunities and to negotiate more favorable commercialterms,

• Combining warehousing facilities and optimizing logistics,• Negotiating company-wide contracts for port services and shore excursions and• Streamlining the use of manning agencies.

We perform our major dry-dock and ship improvement work at dry-dock facilities in The Bahamas, Europe, theU.S., Canada, Singapore and Australia. At February 19, 2016, we have agreements in place for the constructionof 17 cruise ships with three shipyards. We also purchase some of our repair, maintenance and refurbishmentitems from a limited number of maritime suppliers. We believe there are sufficient dry-dock and shipbuildingfacilities and related suppliers to meet our anticipated repair, maintenance, ship improvement and newbuildrequirements.

XV. Insurance

a. General

We maintain insurance to cover a number of risks associated with owning and operating our vessels and othernon-ship related risks. All such insurance policies are subject to coverage limits, exclusions and deductiblelevels. Insurance premiums are dependent on our own loss experience and the general premium requirements ofour insurers. We maintain certain levels of deductibles for substantially all the below-mentioned coverages. Wemay increase our deductibles to mitigate future premium increases. We do not carry coverage related to loss ofearnings or revenues from our ships or other operations.

b. Protection and Indemnity (“P&I”) Coverages

Liabilities, costs and expenses for illness and injury to crew, guest injury, pollution and other third party claimsin connection with our cruise activities are covered by our P&I clubs, which are mutual indemnity associationsowned by ship owners.

We are members of two P&I clubs, which are part of a worldwide group of P&I clubs, known as the InternationalGroup of P&I Clubs (the “IG”). The IG insures directly, and through broad and established reinsurance markets,a large portion of the world’s shipping fleets. Coverage is subject to the P&I clubs’ rules and the limits ofcoverage are determined by the IG.

c. Hull and Machinery Insurance

We maintain insurance on the hull and machinery of each of our ships for reasonable amounts as determined bymanagement. The coverage for hull and machinery is provided by large and well-established international marineinsurers. Most insurers make it a condition for insurance coverage that a ship be certified as “in class” by aclassification society that is a member of the International Association of Classification Societies (“IACS”). Allof our ships are routinely inspected and certified to be in class by an IACS member.

d. War Risk Insurance

We maintain war risk insurance for legal liability to crew, guests and other third parties as well as loss or damageto our vessels arising from war or war-like actions, including terrorist incidents. Items excluded from this

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coverage are claims arising from chemical, nuclear and biological attacks. Our primary war risk insurancecoverage is provided by international marine insurers and our excess war risk insurance is provided by our twoP&I clubs. Under the terms of our war risk insurance coverage, which are typical for war risk policies in themarine industry, insurers can give us seven days’ notice that the insurance policies will be cancelled. However,the policies can be reinstated at different premium rates. This gives insurers the ability to increase our premiumsfollowing events that they determine have increased their risk.

e. Other Insurance

We maintain property insurance covering our shoreside assets and casualty insurance covering liabilities to thirdparties arising from our hotel and transportation business, shore excursion operations and shoreside operations,including our port and related commercial facilities. We also maintain workers compensation, directors andofficer’s liability and other insurance coverages.

XVI. Cruise Ports and Destination Developments

Our cruise brands provide guests with unique vacation experiences and additional home and transit ports throughthe development and management of new or enhanced cruise port facilities. Creating leading destinations as wellas securing preferred ports enables us to grow demand and deliver unique experiences to our guests. Ourinvolvement is usually in cooperation with governmental entities and local operators and typically includesproviding development and management expertise and financial commitments that are connected to long-termport usage and preferential berthing agreements. However, sometimes we provide direct financial support ordevelop the port infrastructure ourselves, including the development and operation of mixed-use commercialproperties. Commercial property lease revenues are included in other cruise revenues. We currently operate orare developing:

• Leased or owned port facilities or have interests in joint ventures that operate leased or owned portfacilities in Barcelona, Spain; Civitavecchia, Naples, Savona and Trieste, Italy; Juneau and Ketchikan,Alaska; Long Beach, California and Marseilles, France for the benefit of our cruise brands and

• Leased or owned port facilities that we have developed as destinations in Cozumel, Mexico; GrandTurk, Turks & Caicos Islands; Puerto Plata, Dominican Republic and Roatán, Honduras; as well asprivate island destinations in The Bahamas, Half Moon Cay and Princess Cays®, principally for thebenefit of our North America cruise brands. The facility in Puerto Plata, Dominican Republic, knownas Amber Cove, is a new port destination strategically located in the central Caribbean cruise regionand opened in October 2015.

These destinations offer a variety of features, including shore excursions, cultural and historic exhibits, watersports, beaches, retail outlets and a variety of themed-dining options.

In addition, we are involved with the development, enhancement and/or financing of government-owned andoperated cruise port facilities in Cape Canaveral, Fort Lauderdale and Miami, Florida; Galveston, Texas; NewOrleans, Louisiana; New York City, New York; San Juan, Puerto Rico and St. Maarten, Kingdom of theNetherlands.

XVII. Principal Joint Ventures

a. Cruise Ship Repair Facility

We own a 40% interest in Grand Bahamas Shipyard Ltd. (“GBSL”) located in Freeport, Grand Bahamas. RoyalCaribbean Cruises Ltd. (“RCCL”) also owns a 40% interest in GBSL and an unaffiliated entity owned by GrandBahamas Port Authority shareholders owns the remaining 20%. We utilize this facility, as well as other shiprepair facilities, for our regularly scheduled dry-dockings, ship improvement work and certain emergency repairs.During 2015, we had 10 ships serviced at this facility. In addition, unaffiliated cruise ships and other types ofships, such as cargo ships, oil and gas tankers and offshore units, are serviced at this facility. GBSL generatedtotal revenues of over $150 million in 2015, with a large portion being derived from work on our cruise ships.

b. Chinese Strategic Joint Venture

In October 2015, we formed a strategic joint venture by partnering with state owned China State ShipbuildingCompany and China Investment Corporation to launch a new cruise brand in the Chinese vacation region.

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Potential plans for the venture could include the purchase of both new and existing cruise ships to be homeported in China.

XVIII. Sustainability

We recognize that our reputation and success depend on having sustainable and transparent operations. Ourcommitment and actions to keep our guests and crew members safe and comfortable, protect the environment,develop and provide opportunities for our workforce, strengthen our stakeholder relations and enhance the portcommunities that our ships visit, as well as the communities where we work, are vital to our success as a businessenterprise and reflective of our core values. We strive to be a company that people want to work for and to be anexemplary global corporate citizen.

We voluntarily publish Sustainability Reports that address governance, commitments, stakeholder engagement,environmental, labor, human rights, society, product responsibility, economic and other sustainability-relatedissues and performance indicators. These reports, which can be viewed at www.carnivalcorp.com andwww.carnivalplc.com were developed in accordance with the Sustainability Reporting Guidelines established bythe Global Reporting Initiative, the global standard for reporting on environmental, social and governancepolicies, practices and performance. We have been publishing Sustainability Reports since 2011.

We help to create a higher standard of living and quality of life in our home communities and those that we visit.We often meet with local government leaders to discuss business and community planning and ways to interactsustainably. We also promote the local destinations, develop certain local ports and cruise terminals, provideemergency aid and support and make philanthropic donations in some of the communities that we operate.

In September 2015, we announced new 2020 sustainability goals reinforcing our commitment to theenvironment, our guests, our employees and the communities in which we operate. We have established ten goalsaimed at reducing our environmental footprint while enhancing the health, safety and security of our guests andcrew members and ensuring sustainable business practices across our brands and business partners in threecategories as follows:

Environmental Goals

• Reduce intensity of carbon dioxide equivalent (“CO2e”) emissions from operations by 25% by 2020relative to our 2005 baseline,

• Continue to improve the quality of our emissions into the air by developing, deploying and operatingEGCSs across our fleet,

• Increase usage of ship-to-shore power connection capabilities,• Increase Advanced Wastewater Purification Systems coverage of our fleet capacity by 10 percentage

points by 2020 relative to our 2014 baseline,• Continue to improve our shipboard operations’ water use efficiency by 5% by 2020 relative to our

2010 baseline and• Continue to reduce waste generated by our shipboard operations by 5% by 2020 relative to our 2010

baseline.

Health, Safety and Security Goals

• Continue to build on our commitment to protect the health, safety and security of guests, employeesand all others working on our behalf.

Sustainable Workforce and Community Goals

• Continue to build a diverse and inclusive workforce and provide all employees with a positive workenvironment and opportunities to build a rewarding career to further drive employee engagement,

• Further develop and implement vendor assurance procedures ensuring compliance with CarnivalCorporation & plc’s Business Partner Code of Conduct and Ethics and

• Continue to work on initiatives and partnerships that support and sponsor a broad range oforganizations for the benefit of the communities where we operate.

Our environmental efforts are focused on, among other things, reducing emissions such as greenhouse gases(“GHGs”) (for example, carbon dioxide (“CO2”) or CO2e, sulfur oxides (“SOx”) and nitrogen oxide (“NOx”)).

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These emissions result from the combustion of the marine fuels consumed by our ships, which accounts forsubstantially all of our total GHG and other emissions. Accordingly, reducing fuel consumption continues to bean important company-wide initiative, which will continue to help reduce emissions. We will continue toimplement our energy-saving and emission reduction strategy, which includes installing some of the bestavailable energy and emission reduction technologies on our ships, such as:

• Efficiency improvements in the areas of hull coatingand designs,

• More efficient pumps, ventilationand waste heat recovery systems,

• ECGSs, • New itineraries,• More advance engine designs, • More efficient propeller designs,• More efficient LED lighting, • Reduction in ship speeds and• More efficient air conditioning, which is the second

largest user of onboard energy after propulsion,• Increased energy use awareness and

training.

In addition, we are designing more energy efficient ships that will enter our fleet in the future, while continuingtoward reducing the fuel consumption of our existing fleet.

We had voluntarily set a goal of delivering a 20% reduction (per unit) from our 2005 baseline of CO2e emissionsfrom shipboard operations by 2015. We achieved our goal one year ahead of schedule and have set a new goal toachieve a 25% CO2e emissions reduction (per unit) from our 2005 baseline by 2020. We measure our ability touse direct energy efficiently by calculating the amount of primary source energy we consume. Our ship fuelconsumption and emission rates and our total ship fuel GHG emissions are as follows:

PercentageChange Since

Measure Units 2015 2014 2008 2014 2008Ship Fuel Consumption Rate . . . . . . . . . . . . . . . . . Grams Fuel/ALB-KM (a) 84 87 104 (3.4)% (19.2)%Ship Fuel GHG Emission Rate . . . . . . . . . . . . . . . . Grams CO2e/ALB-KM (b) 266 274 327 (2.9)% (18.7)%SOx Emission Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . Kg SOx/NM (c) (e) 14.3 16.1 (e) (10.8)%(e)NOx Emission Rate . . . . . . . . . . . . . . . . . . . . . . . . . . Kg NOx/NM (c) (e) 22.5 24.8 (e) (9.3)%(e)Total Ship Fuel GHG

Emissions (in millions) . . . . . . . . . . . . . . . . . . . . . Tonnes CO2e (d) 10.1 10.1 10.0 — 1.0%

(a) We measure and report the ship fuel consumption rate in terms of grams of fuel per available lower berthkilometer (“ALB- KM”). This indicator enables us to make meaningful fuel consumption comparisons thattake into account changes in fleet size, itineraries and passenger capacity.

(b) We measure and report the ship fuel GHG emission rate in terms of grams of CO2e per ALB-KM. Thisindicator enables us to make meaningful GHG emission reduction comparisons that take into accountchanges in fleet size, itineraries and passenger capacity.

(c) We measure SOx and NOx emission rates in terms of total kilograms (“Kg”) of emissions per nautical mile(“NM”). Using an emission rate normalized by distance traveled allows us to compare our pollutant reductionefforts over the reporting periods.

(d) GHG emission data collection and calculations were performed in accordance with our GHG InventoryManagement Plan, the Greenhouse Gas Protocol and International Organization for Standardization (“ISO”)standard 14064-3:2006.

(e) Information for 2015 is not available as of February 19, 2016. Percentage reduction presented is from 2008 to2014.

The rate of decrease in Total Ship Fuel GHG Emissions was offset by the 28% increase in capacity and remainedessentially flat when comparing 2008 to 2015.

As part of our sustainability strategy we have voluntarily reported our carbon footprint via the CDP (formerly theCarbon Disclosure Project) each year since 2007. The CDP rates companies on the depth and scope of theirdisclosures and the quality of their reporting. Our submission included details of our most recently compiledemissions data and reduction efforts, along with our completion of an independent, third-party verification of ourGHG emissions inventory. In November 2015, we were awarded a position on the FTSE 350 and the S&P 500Climate Disclosure Leadership Index as a result of our disclosures and efforts to reduce our carbon footprint. Wealso disclose our water stewardship through the CDP water program.

We also support The Nature Conservancy, which is one of the world’s leading conservation organizations, intheir efforts to restore coral reefs, protect marine ecosystems and promote natural systems to help reduce the

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impact of storms and rising sea levels in coastal communities. All of our brands environmental managementsystems are certified in accordance with ISO 14001.

XIX. Governmental Regulations

a. Maritime Regulations

1. General

Our ships are regulated by numerous international, national, state and local laws, regulations, treaties and otherlegal requirements that govern health, environmental, safety and security matters in relation to our guests, crewand ships. These requirements change regularly, sometimes on a daily basis, depending on the itineraries of ourships and the ports and countries visited. If we violate or fail to comply with any of these laws, regulations,treaties and other requirements we could be fined or otherwise sanctioned by regulators. We are committed tocomplying with, or exceeding, all relevant maritime requirements. All of our ships, and the maritime industry asa whole, are subject to the maritime safety and security regulations established by the International MaritimeOrganization (“IMO”), a specialized agency of the United Nations, and its principal set of requirements asmandated through its International Convention for the Safety of Life at Sea (“SOLAS”).

Our ships are registered, or flagged, in The Bahamas, Bermuda, Italy, Malta, the Netherlands, Panama and theUK, which are also referred to as Flag States. They are regulated by these Flag States through internationalconventions that govern health, environmental, safety and security matters in relation to our guests, crew andships. Representatives of each Flag State conduct periodic inspections, surveys and audits to verify compliancewith these requirements. In addition, we are subject to the decrees, directives, regulations and requirements of theEuropean Union (“EU”), the U.S. and more than 400 other international ports that our ships visit every year.

Our ships are also subject to periodic class surveys, including dry-docking inspections, by ship classificationsocieties to verify that our ships have been maintained in accordance with the rules of the classification societiesand that recommended repairs have been satisfactorily completed. Class certification is one of the necessarydocuments required for our cruise ships to be flagged in a specific country, obtain liability insurance and legallyoperate as passenger cruise ships. Dry-dock frequency, for example, is a statutory requirement mandated bySOLAS. Our ships dry-dock once or twice every five years, depending on the age of the ship. Dry-docking,which requires that the ship be temporarily taken out-of-service, typically lasts for one or more weeks dependingon the amount of work performed. Significant dry-dock work includes hull inspection and related activities, suchas scraping, pressure cleaning and bottom painting, and maintenance of steering and thruster equipment,propulsion engines, stabilizers and ballast tanks. While the ship is out of the water in dry-dock, we also performother repairs, maintenance and ship improvement work. To the extent practical, each ship’s crew including thehotel staff remain with the ship during the dry-dock period and assist in performing repair and maintenance workor participate in occupational, safety or other training.

As noted above, our ships are subject to inspection by the port regulatory authorities, which is also referred to asPort State Control, in the various countries that they visit. Such inspections include verification of compliancewith the maritime safety, security, environmental, customs, immigration, health and labor requirementsapplicable to each port, as well as with international requirements. Many countries have joined together to formregional port regulatory authorities.

Our Boards of Directors have HESS Committees, which are currently each comprised of three independentdirectors. The principal function of the HESS Committees is to assist the boards in fulfilling their responsibility tosupervise and monitor our health, environment, safety, security and sustainability related policies, programs andinitiatives at sea and ashore and compliance with related legal and regulatory requirements. The HESS Committeesand our management team review all significant relevant risks or exposures and associated mitigating actions.

We continue to be committed to implementing appropriate measures to manage identified risks effectively. Aspart of our commitment, we have a Chief Maritime Officer, who is a retired Vice Admiral from the U.S. Navy, tooversee our global maritime operations, including maritime quality assurance and policy, shipbuilding, ship refitsand research and development. To ensure that we are compliant with the legal and regulatory requirements andthat these areas of our business operate in an efficient manner we continue to, among other things:

• Provide regular health, environmental, safety and security support, training, guidance and informationto guests, employees and others working on our behalf,

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• Develop and implement effective and verifiable management systems to fulfill our health,environmental, safety, sustainability and security commitments,

• Perform regular shoreside and shipboard audits and take appropriate action when deficiencies areidentified,

• Report and investigate all health, environmental, safety and security incidents and take appropriateaction to prevent recurrence,

• Identify those employees responsible for managing health, safety, environment, security andsustainability programs and ensure that there are clear lines of accountability and

• Identify the aspects of our business that impact the environment and continue to take appropriate actionto minimize that impact.

2. Maritime Safety Regulations

The IMO has adopted safety standards as part of SOLAS, which apply to all of our ships. To help ensure guestand crew safety and security, SOLAS establishes, among other things, requirements for the following:

• Vessel design, • Life-saving and other equipment,• Structural features, • Fire protection and detection,• Construction and materials, • Safe management and operation,• Refurbishment standards, • Security and• Radio communications, • Musters.

All of our crew undergo regular safety training that meets or exceeds all international maritime regulations,including SOLAS requirements which are periodically revised. These requirements apply to existing ships andships under construction.

SOLAS requires implementation of the International Safety Management Code (“ISM Code”), which provides aninternational standard for the safe management and operation of ships and for pollution prevention. The ISMCode is mandatory for passenger vessel operators. Under the ISM Code, vessel operators are required to:

• Develop a Safety Management System (“SMS”) that includes, among other things, the adoption ofsafety and environmental protection policies setting forth instructions and procedures for operatingvessels safely and describing procedures for responding to emergencies and protecting theenvironment.

• Obtain a Document of Compliance (“DOC”) for the vessel operator, as well as a Safety ManagementCertificate (“SMC”) for each vessel they operate. These documents are issued by the vessel’s FlagState and evidence compliance with the SMS.

• Verify or renew DOCs and SMCs periodically in accordance with the ISM Code.

All of our shoreside and shipboard operations and ships are regularly audited by the national authorities andmaintain the required DOCs and SMCs in accordance with the ISM Code.

We continue to implement policies and procedures that demonstrate our continuing commitment to the safety ofour guests and crew. These policies and procedures include the following:

• Expansion and acceleration of training of our bridge and engine room officers in maritime related bestpractices at our training facilities in Almere, the Netherlands and Rostock, Germany,

• Further standardization of our detailed bridge and engine resource management procedures on all ofour ships,

• Expansion of our existing oversight function to monitor bridge and engine room operations,• Identifying and standardizing best-practice policies and procedures in health, environment, safety and

security disciplines across the entire organization including on all our ships and• Further enhancing our processes for auditing and continuously improving our HESS performance

throughout our operations.

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As members of CLIA, we helped to develop and have implemented policies that are intended to enhanceshipboard safety throughout the cruise industry. In some cases this calls for implementing best practices, whichare in excess of existing legal requirements. These policies primarily relate to the following:

• Location of lifejacket stowage, • Local sounding smoke alarms,• Harmonization of bridge procedures, • Reporting of crimes and missing persons,• Recording the nationality of passengers, • Safeguarding children in youth activity centers,• Common elements of passenger musters, • Security incidents,• Passage planning, • Waste management and• Personnel access to the bridge, • Medical facilities.• Lifeboat loading for training purposes,

Further details on these and other policies can be found on www.cruising.org.

3. Maritime Security Regulations

Our ships are subject to numerous security requirements. These requirements include the International Ship andPort Facility Security Code, which is part of SOLAS, the U.S. Maritime Transportation Security Act of 2002,which addresses U.S. port and waterway security and the U.S. Cruise Vessel Security and Safety Act of 2010,which applies to all of our ships that embark or disembark passengers in the U.S. These regulations includerequirements as to the following:

• Implementation of specific security measures, including onboard installation of a ship security alertsystem,

• Assessment of vessel security,• Efforts to identify and deter security threats,• Training, drills and exercises,• Security plans that may include guest, vehicle and baggage screening procedures, security patrols,

establishment of restricted areas, personnel identification procedures, access control measures andinstallation of surveillance equipment and

• Establishment of procedures and policies for reporting and managing allegations of crimes.

4. Maritime Environmental Regulations

We are subject to numerous international, national, state and local environmental laws, regulations and treatiesthat govern, among other things, air emissions, waste discharges, water management and disposal, and thestorage, handling, use and disposal of hazardous substances such as chemicals, solvents and paints.

i. International Regulations

The principal international convention governing marine pollution prevention and response is the IMO’sInternational Convention for the Prevention of Pollution from Ships (“MARPOL”). MARPOL includes fourannexes containing requirements designed to prevent and minimize both accidental and operational pollution byoil, sewage, garbage and air emissions.

a. Preventing and Minimizing Pollution

MARPOL sets forth specific requirements related to vessel operations, equipment, recordkeeping and reportingthat are designed to prevent and minimize pollution. All of our ships must carry an International Oil PollutionPrevention Certificate, an International Sewage Pollution Prevention Certificate, an International Air PollutionPrevention Certificate and a Garbage Management Plan. The ship’s Flag State issues these certificates, whichevidence their compliance with the MARPOL regulations regarding prevention of pollution by oil, sewage,garbage and air emissions. Certain jurisdictions have not adopted all of these MARPOL annexes but haveestablished various national, regional or local laws and regulations to apply to these areas.

As noted above, MARPOL governs the prevention of pollution by oil from operational measures, as well as fromaccidental discharges. MARPOL requires that discharges of machinery space bilge water pass through pollutionprevention equipment that separates oil from the water and monitors the discharge to ensure that the effluent doesnot exceed 15 parts per million of oil. Our ships must have oily water separators with oil content monitorsinstalled and must maintain a record of certain engine room operations in an Oil Record Book. In addition, we

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have voluntarily installed redundant systems on all of our ships that monitor processed bilge water prior todischarge to ensure that it contains no more than 15 parts per million of oil. This voluntary system providesadditional control to prevent improper bilge water discharges. MARPOL also requires that our ships haveShipboard Oil Pollution Emergency Plans.

MARPOL also governs the discharge of sewage from ships and contains regulations regarding the ships’equipment and systems for the control of sewage discharge, the provision of facilities at ports and terminals forthe reception of sewage and requirements for survey and certification.

MARPOL also governs the discharge of garbage from ships and requires a Garbage Management Plan and aGarbage Record Book. As a result of MARPOL regulations addressing garbage management, the discharge of allgarbage to sea is prohibited unless the discharge is expressly permitted by these regulations.

Furthermore, MARPOL addresses air emissions from vessels, establishes requirements for the prevention of airpollution from ships to reduce emissions of SOx, NOx and particulate matter. It also contains restrictions on theuse of ozone depleting substances (“ODS”) and requires the recording of ODS use, equipment containing ODSand the emission of ODS.

As a means of managing and improving our environmental performance and compliance, we adhere to standardsset by ISO, an international standard-setting body, which produces worldwide industrial and commercialstandards. The environmental management systems of our brands and ships are certified in accordance with ISO14001, the environmental management standard that was developed to help organizations manage theenvironmental impacts of their processes, products and services. ISO 14001 defines an approach to setting andachieving environmental objectives and targets, within a structured management framework.

b. Low Sulfur Fuel

MARPOL Annex VI addresses air emissions from vessels in both auxiliary and main propulsion diesel engineson ships. Annex VI also specifies requirements for Emission Control Areas (“ECAs”) with stricter limitations onsulfur emissions in these areas. Since January 2015, ships operating in the Baltic Sea ECA, the North Sea ECA,the North American ECA and the U.S. Caribbean ECA have been required to use fuel with a sulfur content of nomore than 0.1% or use alternative emission reduction methods (“2015 ECA”). Since July 2015, ships operating inthe port of Hong Kong were required to start using fuel with a sulfur content of no more than 0.5% or usealternative emission reduction methods. Lastly, since October 2015, ships operating at berth in the port ofSydney, Australia were required to start using fuel with a sulfur content of no more than 0.1% or use alternativeemission reduction methods; effective July 2016, this requirement will apply to ships operating anywhere withinthe boundaries of Sydney Harbor.

The MARPOL global limit on fuel sulfur content outside of ECAs will be reduced to 0.5% on and after January2020. This 0.5% global standard is subject to an IMO review by 2018 as to the availability of the required fuel oilto comply with this standard, taking into account the global fuel oil market supply and demand, an analysis oftrends in fuel oil markets and any other relevant issues. If the IMO determines that there is insufficient fuel tocomply with the 0.5% standard in January 2020, then this requirement will be delayed to January 2025, at thelatest. However, the EU Parliament and Council have set 2020 as the final date for the 0.5% fuel sulfur contentlimit to enter force, regardless of the 2018 IMO review results. This EU Sulfur Directive will cover EU MemberStates’ territorial waters that are within 12 nautical miles of their coastline.

In conjunction with an affiliate we will continue to develop and test EGCS designs that will reduce the sulfuremission levels of our higher sulfur bunker fuel to or below the levels required under the ECA limits and the2020 global limits. To allow us sufficient time to install EGCSs on a reasonable schedule, we received anexemption for 32 ships that regularly sailed within the North American and U.S. Caribbean ECAs that havedelayed the requirements to comply with the 2015 ECA limit through agreed upon dates ending in 2016. As ofNovember 30, 2015, EGCSs have been installed on 40 ships, including some of the ships operating under theexemption, and we expect to have them installed on 64 ships by the end of 2016. These efforts will mitigate themajority of the impact from the 2015 ECA. We have, and will, incur additional EGCS operating expenses as webenefit from the use of this technology.

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c. Other Emission Abatement Methods

In the long-term, the cost impacts of achieving progressively lower sulfur emission requirements may be furthermitigated by the favorable impact of future changes in the supply and demand balance for marine and other fuels,future developments of and investments in improved sulfur emission abatement technologies, the use ofalternative lower cost and lower emission fuels and our continued efforts to improve the overall fuel efficiencyacross our fleet. Since 2007, we have achieved an almost 27% cumulative reduction in unit fuel consumption byfocusing on the following:

• Efficiency improvements in the areas of hull coatingsand designs,

• More efficient pumps, ventilationand waste heat recovery systems,

• Improved engine performance, • New itineraries,• More advance engine designs, • More efficient propeller designs,• More efficient LED lighting, • Reduction in ship speeds and• More efficient air conditioning, which is the second

largest user of onboard energy after propulsion,• Increased energy use awareness and

training.

As part of our emission abatement program, we have continued our work with local port authorities to helppromote the development of shore power connections in Juneau, Alaska; Long Beach, Los Angeles, SanFrancisco and San Diego, California; Brooklyn, New York; Halifax, Nova Scotia; Seattle, Washington andVancouver, British Columbia and have equipped 26 ships with the capability to utilize shore power technology.This technology enables our ships to use power from the local electricity provider rather than running theirengines while in port to power their onboard services, and thus reducing our air emissions. Similarly, in an effortto continue our commitment to sustainability and to play a leading role in matters of environmental protection inthe cruise industry, AIDA began using liquefied natural gas (“LNG”) hybrid barge as an ecologically friendlyand flexible power supply and an alternative to shore power, while its ships are moored in the port of Hamburg,Germany.

We announced in 2015 that four next-generation cruise ships for Costa and AIDA will be the first in the industryto be powered at sea by LNG, one of the world’s cleanest burning fossil fuels. Pioneering a new era in the use oflow carbon fuels, these new ships will use LNG to generate 100 percent of the ship’s power both in port and onthe open sea – an innovation that will reduce exhaust emissions to help protect the environment. Additionally,AIDAprima which is expected to be delivered in early 2016 and her 2017 sister ship, will be the first cruise shipsin the world that will regularly use dual-fuel engines for an energy supply with LNG while in port, along with aconnection to shoreside power and an extensive filter system for the treatment of exhaust emissions.

d. Greenhouse Gas Emissions

In January 2013, the IMO approved measures to improve energy efficiency and reduce emissions of GHGs frominternational shipping by adopting technical and operational measures for all ships. The technical measures applyto the design of new vessels, and the operational reduction measures apply to all vessels. Operational reductionmeasures have been implemented through a variety of means, including a Ship Energy Efficiency Plan, improvedvoyage planning and more frequent propeller and hull cleanings. We have established objectives within the ISO14001 environmental management systems of each of our brands to further reduce fuel consumption rates and theresulting CO2e emission rates.

ii. U.S. Federal and State Regulations

The Act to Prevent Pollution from Ships authorizes the implementation of MARPOL in the U.S. and imposesnumerous requirements on our ships, as discussed above. Administrative, civil and criminal penalties may beassessed for violations.

The Oil Pollution Act of 1990 (“OPA 90”) established a comprehensive federal liability regime, as well asprevention and response requirements, relating to discharges of oil in U.S. waters. The major requirementsinclude demonstrating financial responsibility up to the liability limits and having oil spill response plans inplace. We have Certificates of Financial Responsibility that demonstrate our ability to meet the maximumamount of OPA 90 related liability that our ships could be subject to for removal costs and damages, such asfrom an oil spill or a release of a hazardous substance. Under OPA 90, owners or operators of vessels operating

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in U.S. waters must file Vessel Response Plans with the U.S. Coast Guard and must operate in compliance withthese plans. Our Vessel Response Plans have been submitted to the U.S. Coast Guard and we operate inaccordance with our plans. As OPA 90 expressly allows coastal states to impose liabilities and requirementsbeyond those imposed under federal law, many U.S. states have enacted laws more stringent than OPA 90. Someof these state laws impose unlimited liability for oil spills and contain more stringent financial responsibility andcontingency planning requirements.

The Clean Water Act (“CWA”) provides the U.S. Environmental Protection Agency (“EPA”) with the authorityto regulate commercial vessels’ incidental discharges of ballast water, bilge water, gray water, anti-fouling paintsand other substances during normal operations within the U.S. three mile territorial sea and inland waters.

Pursuant to the CWA authority, the U.S. National Pollutant Discharge Elimination System was designed tominimize pollution within U.S. territorial waters. For our affected ships, all of the requirements are laid out inEPA’s Vessel General Permit (“VGP”) for discharges incidental to the normal operations of vessels. The VGPestablishes effluent limits for 27 specific discharges incidental to the normal operation of a vessel. In addition tothese discharge and vessel specific requirements, the VGP includes requirements for inspections, monitoring,reporting and record-keeping. Our vessels have coverage under the VGP and thus are subject to its requirements.

We are subject to the requirements of the U.S. Resource Conservation and Recovery Act for the transportationand disposal of both hazardous and non-hazardous solid wastes that are generated by our ships. In general, vesselowners are required to determine if their wastes are hazardous, comply with certain standards for the propermanagement of hazardous wastes and use hazardous waste manifests for shipments to approved disposalfacilities.

The U.S. National Invasive Species Act (“NISA”) was enacted in response to growing reports of harmfulorganisms being released into U.S. waters through ballast water taken on by vessels in foreign waters. The U.S.Coast Guard adopted regulations under NISA that impose mandatory ballast water management practices for allvessels equipped with ballast water tanks entering U.S. waters. These requirements can be met by performingmid-ocean ballast exchange, by retaining ballast water onboard the vessel or by using environmentally soundballast water treatment methods approved by the U.S. Coast Guard.

Most U.S. states that border navigable waterways or sea coasts have also enacted environmental regulations thatimpose strict liability for removal costs and damages resulting from a discharge of oil or a release of a hazardoussubstance. These laws may be more stringent than U.S. federal law and in some cases have no statutory limits ofliability.

The state of Alaska has enacted legislation that prohibits certain discharges in designated Alaskan waters and setseffluent limits on others. Further, the state requires that certain discharges be reported and monitored to verifycompliance with the standards established by the legislation. Both the state and federal environmental regimes inAlaska are more stringent than the U.S. federal requirements with regard to discharge from vessels in other areas.The legislation also provides that repeat violators of the regulations could be prohibited from operating inAlaskan waters. The state of California also has environmental requirements significantly more stringent than thefederal requirements.

iii. EU Regulations

The EU has adopted a broad range of substantial environmental measures aimed at improving the quality of theenvironment for European citizens and providing them with a high quality of life. To support the implementationand enforcement of European environmental legislation, the EU has adopted directives on environmental liabilityand enforcement and a recommendation providing for minimum criteria for environmental inspections.

The European Commission’s (“EC”) strategy is to reduce atmospheric emissions from ships. The EC strategyseeks to implement SOx Emission Control Areas set out in MARPOL, as discussed below. In addition, the ECgoes beyond the IMO by requiring the use of low sulfur (less than 0.1%) marine gas oil while in EU ports.

5. Maritime Health Regulations

We are committed to providing a healthy environment for all of our guests and crew. We collaborate with publichealth inspection programs throughout the world, such as the Centers for Disease Control and Prevention in the

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U.S. (“CDC”) and the SHIPSAN Project in the EU to ensure that development of these programs leads toenhanced health and hygiene onboard our ships. Through our collaborative efforts, we work with the authoritiesto develop and revise guidelines, review plans and conduct on-site inspections for all newbuilds and significantship renovations. In addition, we continue to maintain our ships by meeting, and often exceeding, applicablepublic health guidelines and requirements, complying with inspections, reporting communicable illnesses andconducting regular crew training and guest education programs.

In 2014, 11.3 million passengers embarked on CLIA member cruise ships from U.S. ports. That year, there wereeight reportable norovirus outbreaks on cruise ships departing from U.S. ports involving a total of 1,547passengers, which represents only 0.014% of cruise passengers on CLIA member cruise ships. By contrast, theCDC reported there are approximately 20 million norovirus cases in a typical year in the U.S., or 6.3% of theU.S. population. It is estimated that 1 in 15 Americans contract the norovirus on land each year, compared to anestimated 1 in 12,000 cruise guests who report that they have contracted the norovirus on a cruise ship during anoutbreak each year. Although outbreaks of gastrointestinal illnesses on ships represent a small percentage of alloutbreaks, the cruise industry has developed and implemented policies and practices to limit gastrointestinalillness onboard ships.

6. Maritime Labor Regulations

In 2006, the International Labor Organization, an agency of the United Nations that develops and overseesinternational labor standards, adopted a Consolidated Maritime Labor Convention (“MLC 2006”). MLC 2006contains a comprehensive set of global standards and includes a broad range of requirements, such as thedefinition of a seafarer, minimum age of seafarers, medical certificates, recruitment practices, training,repatriation, food, recreational facilities, health and welfare, hours of work and rest, accommodations, wages andentitlements. In August 2013, MLC 2006 became effective in certain countries in which we operate.

The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, asamended, establishes minimum standards relating to training, including security training, certification andwatchkeeping for our seafarers.

b. Consumer Regulations

In most major countries where we source our guests, we are required to establish financial responsibility, such asobtaining a guarantee from a reputable insurance company to ensure that, in case of insolvency, our guests willbe refunded their deposits and repatriated without additional cost if insolvency occurs after a cruise starts.

In Australia and most of Europe, we are also obligated to honor our guests’ cruise payments made by them totheir travel agents and tour operators regardless of whether we receive these payments.

c. Guests with Disabilities Regulations

Regulations regarding ship accessibility standards are expected to be issued in the U.S. As a result of theproposed new regulations, we expect that we will be required to make modifications to some of our ships but donot believe the cost of these will have a significant impact on our consolidated financial statements.

XX. Taxation

A summary of our principal taxes and exemptions in the jurisdictions where our significant operations are locatedis as follows:

a. U.S. Income Tax

We are primarily foreign corporations engaged in the business of operating cruise ships in internationaltransportation. We also own and operate, among other businesses, the U.S. hotel and transportation business ofHolland America Princess Alaska Tours through U.S. corporations.

Our North American cruise ship businesses and certain ship-owning subsidiaries are engaged in a trade orbusiness within the U.S. Depending on its itinerary, any particular ship may generate income from sources within

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the U.S. We believe that our U.S. source income and the income of our ship-owning subsidiaries, to the extentderived from, or incidental to, the international operation of a ship or ships, is currently exempt from U.S. federalincome and branch profit taxes.

Our domestic U.S. operations, principally the hotel and transportation business of Holland America PrincessAlaska Tours, are subject to federal and state income taxation in the U.S.

1. Application of Section 883 of the Internal Revenue Code

In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our NorthAmerican cruise ship businesses) are not subject to U.S. federal income tax or branch profits tax on U.S. sourceincome derived from, or incidental to, the international operation of a ship or ships. Applicable U.S. Treasuryregulations provide in general that a foreign corporation will qualify for the benefits of Section 883 if, in relevantpart, (i) the foreign country in which the foreign corporation is organized grants an equivalent exemption tocorporations organized in the U.S. (an “equivalent exemption jurisdiction”) and (ii) the foreign corporation meetsa defined publicly-traded test. Subsidiaries of foreign corporations that are organized in an equivalent exemptionjurisdiction and meet the publicly-traded test also benefit from Section 883. We believe that Panama is anequivalent exemption jurisdiction and Carnival Corporation currently qualifies as a publicly-traded corporationunder the regulations. Accordingly, substantially all of Carnival Corporation’s income is exempt from U.S.federal income and branch profit taxes.

Regulations under Section 883 list items that the Internal Revenue Service (“IRS”) does not consider to beincidental to ship operations. Among the items identified as not incidental are income from the sale of airtransportation, transfers, shore excursions and pre- and post-cruise land packages to the extent earned fromsources within the U.S.

2. Exemption Under Applicable Income Tax Treaties

We believe that the U.S. source transportation income earned by Carnival plc and its Italian resident subsidiarycurrently qualifies for exemption from U.S. federal income tax under applicable bilateral U.S. income taxtreaties.

3. U.S. State Income Tax

Carnival Corporation and Carnival plc and certain of their subsidiaries are subject to various U.S. state incometaxes generally imposed on each state’s portion of the U.S. source income subject to U.S. federal income taxes.However, the state of Alaska imposes an income tax on its allocated portion of the total income of our companiesdoing business in Alaska and certain of their subsidiaries.

b. UK and Australian Income Tax

Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to enterthe UK tonnage tax under a rolling ten-year term and, accordingly, reapply every year. Companies to which thetonnage tax regime applies pay corporation taxes on profits calculated by reference to the net tonnage ofqualifying ships. UK corporation tax is not chargeable under the normal UK tax rules on these brands’ relevantshipping income. Relevant shipping income includes income from the operation of qualifying ships and fromshipping related activities.

For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters,operate qualifying ships that are strategically and commercially managed in the UK. Companies within UKtonnage tax are also subject to a seafarer training requirement.

Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to normalUK corporation tax. Dividends received from subsidiaries of Carnival plc doing business outside the UK aregenerally exempt from UK corporation tax.

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P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the cruisesegment of the Australian vacation region are exempt from Australian corporation tax by virtue of the UK/Australian income tax treaty.

c. Italian and German Income Tax

In early 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapplyfor an additional ten-year period beginning in early 2025. Companies to which the tonnage tax regime appliespay corporation taxes on shipping profits calculated by reference to the net tonnage of qualifying ships.

Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime willbe taxed at an effective tax rate of 5.5%.

Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Germany/Italyincome tax treaty.

d. Income and Other Taxes in Asian Countries

Substantially all of our brands’ income from their international operation in Asian countries is exempt from localcorporation tax by virtue of relevant income tax treaties.

e. Other

In addition to or in place of income taxes, virtually all jurisdictions where our ships call impose taxes, fees andother charges based on guest counts, ship tonnage, passenger capacity or some other measure.

XXI. Trademarks and Other Intellectual Property

We own and have registered or licensed numerous trademarks and domain names, which we believe are widelyrecognized and have considerable value. These intangible assets enable us to distinguish our cruise products andservices, ships and programs from those of our competitors. Our trademarks include the trade names of our cruisebrands, each of which we believe is a widely-recognized brand in the cruise industry, as well as our ship namesand a wide variety of cruise products and services. See Note 11, “Fair Value Measurements, DerivativesInstruments and Hedging Activities” of the DLC Financial Statements, which are included in Annex 1, but do notform part of these Carnival plc financial statements and Item 3. Business Review – “Critical AccountingEstimates – Asset Impairments” within this Strategic Report for additional discussion of our trademarks.

XXII. Competition

We compete with land-based vacation alternatives throughout the world, such as hotels, resorts (including all-inclusive resorts), theme parks, organized tours, casinos, vacation ownership properties, and other internet-basedalternative lodging sites. Our principal cruise competitors are RCCL, Norwegian Cruise Line Holdings, Ltd.(“NCL”) and MSC Cruises. RCCL and NCL each own several brands as follows:

• RCCL owns Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, CDF Croisieresde France and Pullmantur,

• RCCL and TUI AG, the leading German tour operator, jointly own TUI Cruises, a German cruisecompetitor,

• RCCL and Ctrip, a leading Chinese travel service provider, jointly own SkySea Cruises, a domesticChinese cruise competitor and

• NCL owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

Almost 90% of all 2014 global cruise guests sailed with these competitors and us.

D. Website Access to Carnival Corporation & plc SEC Reports

Our Form 10-K, joint Quarterly Reports on Form 10-Q, joint Current Reports on Form 8-K, joint ProxyStatement related to our annual shareholders meeting, Section 16 filings and all amendments to those reports areavailable free of charge on our home pages at www.carnivalcorp.com and www.carnivalplc.com and on the

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SEC’s home page at www.sec.gov as soon as reasonably practicable after we have electronically filed orfurnished these reports with the SEC. The content of any website referred to within this Strategic Report is notincorporated by reference into this Strategic Report.

E. Industry and Market Data

This Strategic Report includes market share and industry data and forecasts that we obtained from industrypublications, third-party surveys and internal company surveys. Industry publications, including those fromCLIA, G.P. Wild and surveys and forecasts, generally state that the information contained therein has beenobtained from sources believed to be reliable. CLIA is a non-profit marketing and training organization formedin 1975 to promote cruising and offer support and training for the travel agent community in North America. Inaddition, CLIA participates in the regulatory and policy development process while supporting measures thatfoster a safe, secure and healthy cruise ship environment. Also, CLIA facilitates strategic relationships betweencruise industry suppliers and organizations, cruise lines, ports and shipyards and provides a forum for interactionwith governmental agencies. All CLIA information, obtained from the CLIA website www.cruising.org, relatesto the CLIA member cruise lines. In 2015, CLIA represents 62 cruise brands that operate 95% of cruise industrycapacity. G.P Wild is an authoritative source of cruise industry statistics and publishes a number of reports andindustry reviews. All G.P. Wild information is obtained from their annual Cruise Industry Statistical Review. Allother references to third party information are publicly available at nominal or no cost. We use the most currentlyavailable industry and market data to support statements as to our market positions. Although we believe that theindustry publications and third-party sources are reliable, we have not independently verified any of the data.Similarly, while we believe our internal estimates with respect to our industry are reliable, they have not beenverified by any independent sources. While we are not aware of any misstatements regarding any industry datapresented herein, our estimates, in particular as they relate to market share and our general expectations, involverisks and uncertainties and are subject to change based on various factors, including those discussed underItem 5. Risk Management and/or Mitigation of Principal Risks within this Strategic Report.

3. Business Review.

2015 Executive Overview

Overall, 2015 was a great year for us as we continued to improve earnings with over 40% growth driven byhigher cruise ticket pricing and onboard spending and lower fuel prices, despite the unfavorable foreign currencyimpact and macroeconomic and geopolitical challenges. We also achieved a ROIC at November 30, 2015 ofnearly 7.5%, which is up from approximately 4.5% two years ago, as we move towards our goal of double digitROIC in the next two to three years, while maintaining a strong balance sheet (we define ROIC as the twelve-month adjusted earnings before interest divided by the monthly average of debt plus equity minus construction-in-progress).

Net income for 2015 increased 44% to $1.8 billion from $1.2 billion for 2014 (diluted earnings per share was$2.26 in 2015 compared to $1.56 in 2014). The increase in our net income for 2015 was driven primarily by thefollowing:

• Increases in cruise ticket pricing, driven primarily by improvements in Alaskan and Caribbeanitineraries for our North America brands and Mediterranean and North European itineraries for ourEAA brands, mostly offset by the net unfavorable foreign currency transactional impact;

• Higher onboard spending by our guests on both sides of the Atlantic and• Lower fuel prices, partially offset from losses on fuel derivatives.

These increases to 2015 net income were partially offset by the unfavorable foreign currency translational impactand higher dry-dock expenses resulting from a higher number of dry-dock days in 2015 compared to 2014.

Our key Non-GAAP performance financial measures for 2015 were as follows (see “Key Performance Non-GAAP Financial Indicators”):

• Adjusted net income increased 40% to $2.1 billion from $1.5 billion for 2014 (adjusted dilutedearnings per share in 2015 was $2.70 compared to $1.93 in 2014);

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• Net revenue yields on a constant currency basis increased 4.3%, comprised of a 3.8% increase in netpassenger ticket revenue yields and a 5.9% increase in net onboard and other revenue yields and

• Net cruise costs excluding fuel per ALBD (“available lower berth day”) on a constant currency basisincreased 3.5%.

Our ability to generate significant operating cash flows allows us to internally fund our capital investments. Inaddition, we are committed to returning “free cash flows” (defined as cash flows from operations less investingactivities) to our shareholders in the form of dividends and/or share buybacks. In 2015, we generated over $4.5billion of cash from operations, 33% higher than last year, and used $2.5 billion to fund investing activities,leaving us with $2.1 billion, the majority of which has been returned to our shareholders through our regularquarterly dividends and share buybacks. In addition, we increased our quarterly dividend by 20% to $0.30 pershare from $0.25 per share and repurchased $276 million of our shares under the Repurchase Program.

We continue to identify and implement new strategies and tactics to strengthen our cruise ticket revenuemanagement processes and systems across our portfolio of brands, such as optimizing our pricing methodologiesand improving our pricing models. In addition, we are in the process of developing a state-of-the-art revenuemanagement system that will ultimately enable our brands to further optimize pricing and inventory. We are alsoimplementing new initiatives to better coordinate and optimize our brands’ global deployment strategies tomaximize guest satisfaction and itinerary profits. Further, we are implementing initiatives to strengthen ouronboard revenue programs. Finally, we added a new port facility, Amber Cove in Puerto Plata, DominicanRepublic, strategically located in the central Caribbean.

We also continue to implement initiatives to create additional demand for our brands, ultimately leading tohigher revenue yields. This includes increasing consumer awareness and consideration of our cruise brands andthe global cruise industry through coordinated media communication, expanded trade-show presence andadvertising.

Our goal is to consistently exceed our guests’ expectations while providing them with a wide variety ofexceptional vacation experiences. We believe that we can achieve this goal by continually focusing our efforts onhelping our guests choose the cruise brand that will meet their unique needs and desires, improving their overallvacation experiences and building state-of-the-art ships with innovative onboard offerings and unequaled guestservices. We are continuing to work on the next generation of innovative guest experiences so as to ensure wewill be consistently exceeding our guest expectations.

Princess celebrated its 50th anniversary this year with an array of celebratory activities and entertainmentthroughout the year to commemorate half a century of cruising, including a reunion of the original cast of “TheLove Boat” TV series, and an award winning float in the New Years’ Day Rose Bowl Parade. Also, Cunardcelebrated its 175th anniversary in cities around the world that climaxed in May with the first ever meeting of thethree Queens in Liverpool, England. This event attracted more than 1.3 million shoreside spectators, in what mayhave been the largest attendance at a single day maritime event anywhere in the world. Finally, we had a fiveship event in the Sydney Harbor for P&O Cruises (Australia) that attracted well over three hours of live coverageon Australia’s “Today” show.

Strong relationships with our travel agents are especially vital to our success. We continue to strengthen ourrelationship with the travel agent community by increasing our communication and outreach, implementingchanges based on travel agent feedback and improving our educational programs to assist agents in stimulatingcruise demand.

In 2015, we reinforced our leadership position in China with the successful introduction of our fourth shiphomeported in China. We believe that we have significant opportunities to continue to grow our presence inChina due to its large and growing middle-class population and expansion of their international tourism. We alsointend to expand our brand portfolio in China in the future. As we execute our strategy to accelerate growth inChina, we have the benefit of nine years of local experience to help guide our expansion and enhance our cruiseproducts and services to make them even more attractive to our Chinese guests.

With 99 ships and more than 10.8 million guests in 2015, we have the scale to optimize our structure by utilizingour combined purchasing volumes and common technologies as well as implementing cross-brand initiativesaimed at cost containment. We have also established global leadership positions for communications, guest

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experience, maritime, procurement, revenue management and strategy to increase collaboration andcommunication across our brands and help coordinate our global efforts and initiatives.

We consider health, environment, safety, security and sustainability matters to be core guiding principles. Ouruncompromising commitment to the safety and comfort of our guests and crew is paramount to the success of ourbusiness. We are committed to operating a safe and reliable fleet and protecting the health, safety and security ofour guests, employees and all others working on our behalf, thereby promoting an organization that is free ofinjuries, illness and loss. We continue to focus on further enhancing the safety measures onboard all of our ships.We are also devoted to protecting the environment in which our vessels sail and the communities in which weoperate. We are dedicated to fully complying with, or exceeding, all relevant legal and statutory requirementsrelated to health, environment, safety, security and sustainability throughout our business.

We employ an average of 82,200 crew members, including officers, onboard the ships we currently operate,which excludes employees who are on a leave. We also have an average of 10,000 full-time and 2,400 part-time/seasonal shoreside employees. Our goal is to recruit, develop and retain the finest shipboard and shoresideemployees. A team of highly motivated and engaged employees is key to delivering vacation experiences thatexceed our guests’ expectations. We are a diverse organization and value and support our talented and diverseemployee base. We also are committed to employing people from around the world and hiring them based on thequality of their experience, skills, education and character, without regard for their identification with any groupor classification of people.

In 2015, we introduced P&O Cruises (UK)’s 3,647-passenger Britannia, the largest ship ever built specificallyfor British guests and named by Her Majesty, Queen Elizabeth II. In addition, we signed eight new ship ordersthis year. As of February 19, 2016, we have a total of 17 cruise ships scheduled to be delivered between 2016 and2020. Some of these ships will replace existing capacity as less efficient ships exit our fleet. Since 2006, we haveremoved 17 ships from our fleet and will remove one more ship in March 2016. We have a disciplined, measuredapproach to capacity growth so that we achieve an optimal balance of supply and demand to maximize ourprofitability.

Outlook for the 2016 First Quarter and Full Year

On December 18, 2015, we said that we expected our adjusted diluted earnings per share for the 2016 firstquarter to be in the range of $0.28 to $0.32 and 2016 full year to be in the range of $3.10 to $3.40 (see “KeyPerformance Non-GAAP Financial Indicators”). Our guidance was based on the assumptions in the table below.

On January 26, 2016 updated only for the current assumptions in the table below, our adjusted diluted earningsper share for the 2016 full year would decrease by $0.08. This decrease was caused by foreign currency exchangerates, including both foreign currency translational and transactional impacts of $0.11 per share, partially offsetby a $0.03 per share increase due to lower fuel prices, net of forecasted realized losses on fuel derivatives. Inaddition, our adjusted diluted earnings per share for the 2016 first quarter would decrease by $0.02.

2016 AssumptionsDecember 18, 2015 January 26, 2016

First quarter fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . $ 239 $ 226Full year fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . . . . $ 246 $ 222

First quarter currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. dollar to euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ 1.08U.S. dollar to sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.51 $ 1.44U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.73 $ 0.71U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.73 $ 0.71

Full year currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. dollar to euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ 1.08U.S. dollar to sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.51 $ 1.43U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.73 $ 0.70U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.73 $ 0.71

The fuel and currency assumptions used in our guidance change daily and, accordingly, our forecasts changedaily based on the changes in these assumptions.

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The above forward-looking statements involve risks, uncertainties and assumptions with respect to us. There aremany factors that could cause our actual results to differ materially from those expressed above including, but notlimited to, incidents, such as ship incidents, security incidents, the spread of contagious diseases and threatsthereof, adverse weather conditions or other natural disasters and the related adverse publicity, economicconditions and adverse world events, changes in and compliance with various laws and regulations under whichwe operate and other factors that could adversely impact our revenues, costs and expenses. You should read theabove forward-looking statements together with the discussion of these and other risks under Item 5. RiskManagement and/or Mitigation of Principle Risks within this Strategic Report and “Cautionary Note ConcerningFactors That May Affect Future Results” within this Strategic Report.

Critical Accounting Estimates

Our critical accounting estimates are those that we believe require our most significant judgments about theeffect of matters that are inherently uncertain. A discussion of our critical accounting estimates, the underlyingjudgments and uncertainties used to make them and the likelihood that materially different estimates would bereported under different conditions or using different assumptions based on IFRS accounting standards is asfollows:

Ship Accounting

Our most significant assets are our ships, including ship improvements and ships under construction, whichrepresent 78% of our total assets at November 30, 2015. We make several critical accounting estimates withrespect to our ship accounting. First, in order to compute our ships’ depreciation expense, which represented 11%of our cruise costs and expenses in 2015, we have to estimate the useful life of each of our ships as well as theirresidual values. Secondly, we account for ship improvement costs by capitalizing those costs that we believe addvalue to our ships and have a useful life greater than one year, and depreciate those improvements over theshorter of their or the ships’ estimated remaining useful life, while the costs of repairs and maintenance,including minor improvement costs and dry-dock expenses, are charged to expense as incurred. Finally, when werecord the retirement of a ship component that is included within the ship’s cost basis, we may have to estimatethe net book value of the asset being retired in order to remove it from the ship’s cost basis.

We determine the useful life of our ships and ship improvements based on our estimates of the period over whichthe assets will be of economic benefit to us, including the impact of long-term vacation market conditions,marketing and technical obsolescence, competition, physical deterioration, historical useful lives of similarly-built ships, regulatory constraints and maintenance requirements. In addition, we consider estimates of theweighted-average useful lives of the ships’ major component systems, such as the hull, cabins, main electric,superstructure and engines. Taking all of this into consideration, we have estimated our new ships’ useful lives at30 years.

We determine the residual value of our ships based on our long-term estimates of their resale value at the end oftheir useful life to us but before the end of their physical and economic lives to others, historical resale values ofour and other cruise ships and viability of the secondary cruise ship market. We have estimated our residualvalues at 15% of our original ship cost.

Given the large size and complexity of our ships, ship accounting estimates require considerable judgment andare inherently uncertain. We do not have cost segregation studies performed to specifically componentize ourships. In addition, since we do not separately componentize our ships, we do not identify and track depreciationof original ship components. Therefore, we typically have to estimate the net book value of components that areretired, based primarily upon their replacement cost, their age and their original estimated useful lives.

If materially different conditions existed, or if we materially changed our assumptions of ship useful lives andresidual values, our depreciation expense, loss on retirement of ship components and net book value of our shipswould be materially different. In addition, if we change our assumptions in making our determinations as towhether improvements to a ship add value, the amounts we expense each year as repair and maintenance expensecould increase, which would be partially offset by a decrease in depreciation expense, resulting from a reductionin capitalized costs. Our 2015 ship depreciation expense would have increased by approximately $40 millionassuming we had reduced our estimated 30-year ship useful life estimate by one year at the time we took deliveryor acquired each of our ships. In addition, our 2015 ship depreciation expense would have increased by

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approximately $210 million assuming we had estimated our ships to have no residual value at the time of theirdelivery or acquisition.

We believe that the estimates we made for ship accounting purposes are reasonable and our methods areconsistently applied in all material respects and, accordingly, result in depreciation expense that is based on arational and systematic method to equitably allocate the costs of our ships to the periods during which we usethem. In addition, we believe that the estimates we made are reasonable and our methods consistently applied inall material respects in determining (1) the useful life and residual values of our ships, including shipimprovements; (2) which improvement costs add value to our ships and (3) the net book value of ship componentassets being retired. Finally, we believe our critical ship accounting estimates are generally comparable withthose of other major cruise companies.

Asset Impairments

Impairment reviews of our cruise ships and goodwill require us to make significant estimates to determine thefair values of these ships and cruise brands.

For our cruise ships, we perform our impairment reviews, if required, at the individual cruise ship level, which isthe lowest level for which we maintain identifiable cash flows that are independent of the cash flows of otherassets and liabilities. See Note 10 “Property and Equipment” of the Carnival plc financial statements.

We believe it is probable that each of our cruise brands’ estimated fair value that carries goodwill atNovember 30, 2015 exceeded their carrying value. See Note 11 “Goodwill” of the Carnival plc financialstatements.

The determination of fair value includes numerous assumptions that are subject to various risks and uncertainties,unless a comparable, viable actively-traded market exists, which is usually not the case for cruise ships andcruise brands. Our ships’ fair values are typically estimated based either on ship sales price negotiations ordiscounted future cash flows. The principal assumptions used to calculate our discounted future cash flowsinclude forecasted future operating results over the expected period we believe the ships will have economicbenefit to us and their estimated residual values.

In performing annual assessments of our cruise brands that carry goodwill, factors that we consider to determinetheir effect on each of the cruise brand’s estimated fair values include industry and market conditions,macroeconomic conditions, changes to weighted-average cost of capital (“WACC”), overall financialperformance, changes in fuel prices and capital expenditures. In determining the estimated fair values of cruisebrands utilizing discounted future cash flow analysis for our goodwill impairment tests, significant judgments aremade related to forecasted operating results, including net revenue yields and net cruise costs including fuelprices; capacity changes, including the expected rotation of vessels into, or out of, the cruise brand; WACC ofmarket participants, adjusted for the risk attributable to the geographic regions in which the cruise brandoperates; capital expenditures; proceeds from forecasted dispositions of ships and terminal values.

We believe that we have made reasonable estimates and judgments in determining whether our cruise ships andgoodwill have been impaired. However, if there is a change in assumptions used or if there is a change in theconditions or circumstances influencing fair values in the future, then we may need to recognize an impairmentcharge.

Contingencies

We periodically assess the potential liabilities related to any lawsuits or claims brought against us, as well as forother known unasserted claims, including environmental, legal, regulatory, guest and crew and tax matters. Inaddition, we periodically assess the recoverability of our trade and other receivables and our charter-hire andother counterparty credit exposures, such as contractual nonperformance by our Asian ship charter tour operatorsand financial and other institutions with which we conduct significant business. Our credit exposure also includescontingent obligations related to cash payments received directly by travel agents and tour operators for cashcollected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’cruise payments made by them to their travel agents and tour operators regardless of whether we have receivedthese payments. While it is typically very difficult to determine the timing and ultimate outcome of these matters,we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or

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final adjudication of such matters and whether a reasonable estimation of such probable matters, if any, can bemade. In assessing probable losses, we make estimates of the amount of highly probable insurance recoveries, ifany, which are recorded as assets. We accrue a liability and establish a reserve when we believe a loss is probableand the amount of the loss can be reasonably estimated in accordance with IFRS. Such accruals and reserves aretypically based on developments to date, management’s estimates of the outcomes of these matters, ourexperience in contesting, litigating and settling other similar matters, historical claims experience, actuariallydetermined estimates of liabilities and any related insurance coverages. See Note 23 “Contingent Liabilities” ofthe Carnival plc financial statements.

Given the inherent uncertainty related to the eventual outcome of these matters and potential insurancerecoveries, it is possible that all or some of these matters may be resolved for amounts materially different fromany provisions or disclosures that we may have made with respect to their resolution. In addition, as newinformation becomes available, we may need to reassess the amount of asset or liability that needs to be accruedrelated to our contingencies. All such revisions in our estimates could materially impact our results of operationsand financial position.

Results of Operations

We earn substantially all of our cruise revenues from the following:

• sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and fromairports near our ships’ home ports and cancellation fees. The cruise ticket price typically includesaccommodations, most meals, some non-alcoholic beverages and most onboard entertainment. We alsocollect fees, taxes and other charges from our guests, and

• sales of goods and services primarily onboard our ships not included in the cruise ticket price includingsubstantially all liquor and some non-alcoholic beverage sales, casino gaming, shore excursions, giftshop sales, photo sales, communication services, full service spas, specialty themed restaurants, cruisevacation protection programs and pre- and post-cruise land packages. These goods and services areprovided either directly by us or by independent concessionaires, from which we receive either apercentage of their revenues or a fee.

We incur cruise operating costs and expenses for the following:

• the costs of passenger cruise bookings, which represent costs that are directly associated with passengercruise ticket revenues, and include travel agent commissions, air and other transportation related costs,fees, taxes and other charges that vary with guest head counts and related credit and debit card or directdebit fees,

• onboard and other cruise costs, which represent costs that are directly associated with onboard andother revenues, and include the costs of liquor and some non-alcoholic beverages, costs of tangiblegoods sold by us in our gift shops and from our photo sales, communication costs, costs of cruisevacation protection programs, costs of pre- and post-cruise land packages and related credit and debitcard or direct debit fees. Concession revenues do not have significant associated expenses because thecosts and services incurred for concession revenues are borne by our concessionaires,

• fuel costs, which include fuel delivery costs,• payroll and related costs, which represent all costs related to our shipboard personnel, including deck

and engine crew, including officers, and hotel and administrative employees, while costs associatedwith our shoreside personnel are included in selling and administrative expenses,

• food costs, which include both our guest and crew food costs and• other ship operating expenses, which include port costs that do not vary with guest head counts, repairs

and maintenance, including minor improvements and dry-dock expenses, hotel costs, entertainment,gains and losses on ship sales, ship impairments, freight and logistics, insurance premiums and all othership operating expenses.

For segment information related to our North America and EAA cruise brands’ revenues, expenses, operatingincome and other financial information, see Note 12 – “Segment Information” of the DLC Financial Statements,which are included in Annex 1, but do not form part of these Carnival plc financial statements.

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Statistical Information

Years Ended November 30,2015 2014

ALBDs (in thousands) (a) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307 76,000Occupancy percentage (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.8% 104.1%Passengers carried (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,837 10,566Fuel consumption in metric tons (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,181 3,194Fuel consumption in metric tons per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.041 0.042Fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 393 $ 636Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. dollar to euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.12 $ 1.34U.S. dollar to sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.54 $ 1.66U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.76 $ 0.91U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.79 $ 0.91

(a) ALBD is a standard measure of passenger capacity for the period that we use to approximate rate andcapacity variances, based on consistently applied formulas that we use to perform analyses to determine themain non-capacity driven factors that cause our cruise revenues and expenses to vary. ALBDs assume thateach cabin we offer for sale accommodates two passengers and is computed by multiplying passengercapacity by revenue-producing ship operating days in the period.

(b) In 2015 compared to 2014, we had a 1.7% capacity increase in ALBDs comprised of a 4.1% capacityincrease in our EAA brands and a slight capacity increase in our North America brands.

Our EAA brands’ capacity increase was caused by:

• full year impact from one Costa 3,692-passenger capacity ship delivered in 2014 and• the partial year impact from one P&O Cruises (UK) 3,647-passenger capacity ship delivered in

2015.

These increases were partially offset by:

• full year impact from the bareboat charter/sale of a Costa ship and a former Ibero Cruises(“Ibero”) ship and

• more ship dry-dock days in 2015 compared to 2014.

Our North America brands’ slight capacity increase was caused by the full year impact from onePrincess 3,560-passenger capacity ship delivered in 2014.

This increase was partially offset by:

• more ship dry-dock days in 2015 compared to 2014 and• fewer ship operating days due to pro rated voyages.

(c) In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, whichassumes two passengers per cabin even though some cabins can accommodate three or more passengers.Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.

2015 Compared to 2014

Revision of Prior Period Financial Statements

The Business Review within this Strategic Report of the results of operations is based on the revisedConsolidated Statement of Income for the year ended November 30, 2014 (see “Note 1 – General – Revision ofPrior Period Financial Statements” of the DLC Financial Statements, which are included in Annex 1, but do notform part of these Carnival plc financial statements for additional discussion).

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Revenues

Consolidated

Cruise passenger ticket revenues made up 74% of our 2015 total revenues. Cruise passenger ticket revenuesdecreased by $288 million, or 2.4%, to $11.6 billion in 2015 from $11.9 billion in 2014.

This decrease was caused by the foreign currency translational impact from a stronger U.S. dollar against theeuro, sterling and the Australian dollar (“2015 foreign currency translational impact”), which accounted for $715million.

This decrease was partially offset by:

• $205 million – 1.7% capacity increase in ALBDs;• $155 million – net increase in cruise ticket pricing, driven primarily by improvements in Alaskan and

Caribbean itineraries for our North America brands and Mediterranean and North European itinerariesfor our EAA brands, mostly offset by net unfavorable foreign currency transactional impacts and

• $86 million – slight increase in occupancy.

The remaining 26% of 2015 total revenues were substantially all comprised of onboard and other cruiserevenues, which increased by $107 million, or 2.8%, to $3.9 billion in 2015 from $3.8 billion in 2014.

This increase was caused by:

• $185 million – higher onboard spending by our guests;• $65 million – 1.7% capacity increase in ALBDs and• $27 million – slight increase in occupancy.

These increases were partially offset by the 2015 foreign currency translational impact, which accounted for$165 million.

Onboard and other revenues included concession revenues that decreased slightly and remained at $1.1 billion inboth 2015 and 2014.

North America Brands

Cruise passenger ticket revenues made up 72% of our North America brands’ 2015 total revenues. Cruisepassenger ticket revenues increased by $152 million, or 2.2% to $7.0 billion in 2015 from $6.9 billion in 2014.

This increase was caused by:

• $132 million – 2.0 percentage point increase in occupancy and• $26 million – net increase in cruise ticket pricing, driven primarily by improvements in Alaskan and

Caribbean itineraries, mostly offset by unfavorable foreign currency transactional impacts.

The remaining 28% of our North America brands’ 2015 total revenues were comprised of onboard and othercruise revenues, which increased by $149 million, or 5.8%, to $2.7 billion in 2015 from $2.6 billion in 2014.

This increase was caused by:

• $110 million – higher onboard spending by our guests and• $49 million – 2.0 percentage point increase in occupancy.

These increases were partially offset by lower third party revenues, which accounted for $18 million.

Onboard and other revenues included concession revenues that increased by $12 million, or 1.6%, to $747million in 2015 from $735 million in 2014.

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EAA Brands

Cruise passenger ticket revenues made up 82% of our EAA brands’ 2015 total revenues. Cruise passenger ticketrevenues decreased by $430 million, or 8.5%, to $4.6 billion in 2015 from $5.0 billion 2014.

This decrease was caused by:

• $715 million – 2015 foreign currency translational impact and• $58 million – 1.2 percentage point decrease in occupancy.

These decreases were partially offset by:

• $205 million – 4.1% capacity increase in ALBDs and• $135 million – increase in cruise ticket pricing, driven primarily by improvements in Mediterranean

and North European itineraries and favorable foreign currency transactional impacts.

The remaining 18% of our EAA brands’ 2015 total revenues were comprised of onboard and other cruiserevenues, which decreased by $81 million, or 7.3%, to $1.0 billion in 2015 from $1.1 billion in 2014.

This decrease was caused by the 2015 foreign currency translational impact, which accounted for $165 million.

This decrease was partially offset by:

• $51 million – higher onboard spending by our guests and• $45 million – 4.1% capacity increase in ALBDs.

Onboard and other revenues included concession revenues that decreased by $38 million, or 10%, to $329million in 2015 from $367 million in 2014. This decrease was caused by the 2015 foreign currency translationalimpact.

Costs and Expenses

Consolidated

Operating costs and expenses decreased by $973 million, or 9.3%, to $9.4 billion in 2015 from $10.4 billion in2014.

This decrease was caused by:

• $776 million – lower fuel prices;• $475 million – 2015 foreign currency translational impact;• $53 million – nonrecurrence of impairment charges incurred in 2014 related to Grand Celebration and

Grand Holiday;• $43 million – lower fuel consumption per ALBD and• $20 million – gain on a litigation settlement.

These decreases were partially offset by:

• $176 million – 1.7% capacity increase in ALBDs;• $106 million – higher dry-dock expenses as a result of higher number of dry-dock days;• $37 million – nonrecurrence of a gain from the sale of Costa Voyager in 2014;• $28 million – slight increase in occupancy and• $47 million – various other operating expenses, net, partially offset by favorable foreign currency

transactional impacts.

Selling and administrative expenses remained flat at $2.1 billion in both 2015 and 2014.

Depreciation and amortization expenses decreased slightly and remained at $1.6 billion in both 2015 and 2014.

Our total costs and expenses as a percentage of revenues decreased to 84% in 2015 from 89% in 2014.

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North America Brands

Operating costs and expenses decreased by $517 million, or 8.2%, to $5.8 billion in 2015 from $6.3 billion in2014.

This decrease was caused by:

• $503 million – lower fuel prices;• $41 million – decreases in commissions, transportation and other related expenses;• $25 million – lower fuel consumption per ALBD;• $19 million – gain on a litigation settlement and• $30 million – various other operating expenses, net, which included favorable foreign currency

transactional impacts.

These decreases were partially offset by:

• $58 million – higher dry-dock expenses as a result of higher number of dry-dock days and• $43 million – 2.0 percentage point increase in occupancy.

Our total costs and expenses as a percentage of revenues decreased to 81% in 2015 from 89% in 2014.

EAA Brands

Operating costs and expenses decreased by $472 million, or 12%, to $3.4 billion in 2015 from $3.9 billion in2014.

This decrease was caused by:

• $476 million – 2015 foreign currency translational impact;• $273 million – lower fuel prices and• $53 million – nonrecurrence of impairment charges incurred in 2014 related to Grand Celebration and

Grand Holiday.

These decreases were partially offset by:

• $159 million – 4.1% capacity increase in ALBDs;• $49 million – higher dry-dock expenses as a result of higher number of dry-dock days;• $37 million – nonrecurrence of a gain from the sale of Costa Voyager recognized in 2014;• $26 million – increases in commissions, transportation and other related expenses and• $59 million – various other operating expenses, net, which included unfavorable foreign currency

transactional impacts.

Our total costs and expenses as a percentage of revenues decreased to 83% in 2015 from 86% in 2014.

Operating Income

Our consolidated operating income increased by $802 million, or 45%, to $2.6 billion in 2015 from $1.8 billionin 2014. Our North America brands’ operating income increased by $766 million, or 74%, to $1.8 billion in 2015from $1.0 billion in 2014, and our EAA brands’ operating income increased by $45 million, or 5.0%, to $938million in 2015 from $893 million in 2014. These changes were primarily due to the reasons discussed above.

Nonoperating Expense

Net interest expense decreased by $71 million, or 25%, to $217 million in 2015 from $288 million in 2014primarily due to lower level of average borrowings, favorable foreign currency exchange rates and lower interestrates.

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Losses on fuel derivatives, net were comprised of the following (in millions):

Year Ended November 30,2015 2014

Unrealized losses on fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (332) $ (268)Realized losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244) (3)

Losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (576) $ (271)

Net income tax expense increased by $33 million to $42 million in 2015 from $9 million in 2014.

Key Performance Non-GAAP Financial Indicators

We use net cruise revenues per ALBD (“net revenue yields”), net cruise costs per ALBD and net cruise costsexcluding fuel per ALBD as significant non-GAAP financial measures of our cruise segments’ financialperformance. These measures enable us to separate the impact of predictable capacity changes from the moreunpredictable rate changes that affect our business; gains and losses on ship sales and ship impairments, net; andrestructuring expenses that are not part of our core operating business. We believe these non-GAAP measuresprovide useful information to investors and expanded insight to measure our revenue and cost performance as asupplement to our U.S. GAAP consolidated financial statements.

Net revenue yields are commonly used in the cruise industry to measure a company’s cruise segment revenueperformance and for revenue management purposes. We use “net cruise revenues” rather than “gross cruiserevenues” to calculate net revenue yields. We believe that net cruise revenues is a more meaningful measure indetermining revenue yield than gross cruise revenues because it reflects the cruise revenues earned net of ourmost significant variable costs, which are travel agent commissions, cost of air and other transportation, certainother costs that are directly associated with onboard and other revenues and credit and debit card fees.Substantially all of our remaining cruise costs are largely fixed, except for the impact of changing prices andfood expenses, once our ship capacity levels have been determined.

Net passenger ticket revenues reflect gross passenger ticket revenues, net of commissions, transportation andother costs. Net onboard and other revenues reflect gross onboard and other revenues, net of onboard and othercruise costs. Net passenger ticket revenue yields and net onboard and other revenue yields are computed bydividing net passenger ticket revenues and net onboard and other revenues by ALBDs.

Net cruise costs per ALBD and net cruise costs excluding fuel per ALBD are the most significant measures weuse to monitor our ability to control our cruise segments’ costs rather than gross cruise costs per ALBD. Weexclude the same variable costs that are included in the calculation of net cruise revenues to calculate net cruisecosts with and without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Inaddition, we exclude gains and losses on ship sales and ship impairments, net and restructuring expenses fromour calculation of net cruise costs with and without fuel as they are not considered part of our core operatingbusiness and, therefore, are not an indication of our future earnings performance. As such, we also believe it ismore meaningful for gains and losses on ship sales and ship impairments, net and restructuring expenses to beexcluded from our net income and earnings per share and, accordingly, we present adjusted net income andadjusted earnings per share excluding these items.

As a result of our revision of 2014 cruise ship operating expenses, our previously reported results changed asfollows (in millions, except per ALBD data):

Year Ended November 30, 2014As Previously

Reported As Revised

Gross cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 161.69 $ 161.93Net cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 124.35 $ 124.59Net cruise costs excluding fuel per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 97.60 $ 97.84U.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,236 1,216Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,524 1,504

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In addition, our EAA cruise brands utilize the euro, sterling and Australian dollar as their functional currency, themonetary unit of the primary economic environment in which they operate, to measure their results and financialcondition. This subjects us to foreign currency translational risk. All of our North American and EAA cruisebrands also have revenues and expenses that are in a currency other than their functional currency. This subjectsus to foreign currency transactional risk.

We report non-GAAP financial measures on a “constant dollar” and “constant currency” basis assuming the 2015periods’ currency exchange rates have remained constant with the 2014 periods’ rates. These metrics facilitate acomparative view for the changes in our business in an environment with fluctuating exchange rates.

Constant dollar reporting is a Non-GAAP financial measure that removes only the impact of changes inexchange rates on the translation of our EAA brands.

Constant currency reporting is a Non-GAAP financial measure that removes the impact of changes in exchangerates on the translation of our EAA brands (as in constant dollar) plus the transactional impact of changes inexchange rates from revenues and expenses that are denominated in a currency other than the functional currencyfor both our North America and EAA brands.

Examples:

• The translation of our EAA brand operations to our U.S. dollar reporting currency results in decreasesin reported U.S. dollar revenues and expenses if the U.S. dollar strengthens against these foreigncurrencies and increases in reported U.S. dollar revenues and expenses if the U.S. dollar weakensagainst these foreign currencies.

• Our North America brands have a U.S. dollar functional currency but also have revenue and expensetransactions in currencies other than the U.S. dollar. If the U.S. dollar strengthens against these othercurrencies, it reduces the U.S. dollar revenues and expenses. If the U.S. dollar weakens against theseother currencies, it increases the U.S. dollar revenues and expenses.

• Our EAA brands have a euro, sterling and Australian dollar functional currency but also have revenueand expense transactions in currencies other than their functional currency. If their functional currencystrengthens against these other currencies, it reduces the functional currency revenues and expenses. Ifthe functional currency weakens against these other currencies, it increases the functional currencyrevenues and expenses.

Our foreign currency transactional impact is more significant to our 2015 results compared to 2014 given thecontinuing expansion of our global business and the heightened volatility in foreign currency exchange rates.This differed from previous years when our constant dollar reporting removed substantially all of the impact ofchanges in currency exchange rates between periods. Accordingly, we also reported on a constant currency basisbeginning in 2015. See “Quantitative and Qualitative Disclosures About Market Risk” for a further discussion ofthe 2016 impact of currency exchange rate changes.

Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedgesare recognized currently in earnings. We believe that unrealized gains and losses on fuel derivatives are not anindication of our earnings performance since they relate to future periods and may not ultimately be realized inour future earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuelderivatives to be excluded from our net income and earnings per share and, accordingly, we present adjusted netincome and adjusted earnings per share excluding these unrealized gains and losses.

We have excluded from our earnings guidance the impact of unrealized gains and losses on fuel derivativesbecause we do not believe they are an indication of our future earnings performance. Accordingly, our earningsguidance is presented on an adjusted basis only. As a result, management has not provided a reconciliationbetween forecasted adjusted earnings per share guidance and forecasted U.S. GAAP earnings per share guidancebecause it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation withoutunreasonable effort. However, we do forecast realized gains and losses on fuel derivatives by applying currentBrent prices to the derivatives that settle in the forecast period.

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or superior to the

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financial information prepared in accordance with U.S. GAAP. There are no specific rules for determining ournon-GAAP as reported, constant dollar and constant currency financial measures and, accordingly, they aresusceptible to varying calculations, and it is possible that they may not be exactly comparable to the like-kindinformation presented by other companies, which is a potential risk associated with using these measures tocompare us to other companies.

Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues byALBDs as follows (dollars in millions, except yields):

Years Ended November 30,

2015

2015ConstantDollar 2014

Passenger ticket revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,601 $ 12,316 $ 11,889Onboard and other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,887 4,052 3,780

Gross cruise revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,488 16,368 15,669Less cruise costs

Commissions, transportation and other . . . . . . . . . . . . . . . . . . . . . . . (2,161) (2,324) (2,299)Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (526) (549) (519)

(2,687) (2,873) (2,818)

Net passenger ticket revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,440 9,992 9,590Net onboard and other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,361 3,503 3,261

Net cruise revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,801 $ 13,495 $ 12,851

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Gross revenue yields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200.34 $ 211.73 $ 206.17% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.8)% 2.7% 0.1%

Net revenue yields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 165.58 $ 174.57 $ 169.09% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.1)% 3.2%Net passenger ticket revenue yields . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 122.11 $ 129.25 $ 126.18% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.2)% 2.4%Net onboard and other revenue yields . . . . . . . . . . . . . . . . . . . . . . . . $ 43.48 $ 45.32 $ 42.90% increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 5.6%

Years Ended November 30,

2015

2015ConstantCurrency 2014

Net passenger ticket revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,440 $ 10,123 $ 9,590Net onboard and other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,361 3,513 3,261

Net cruise revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,801 $ 13,636 $ 12,851

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Net revenue yields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 165.58 $ 176.39 $ 169.09% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.1)% 4.3%Net passenger ticket revenue yields . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 122.11 $ 130.94 $ 126.18% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.2)% 3.8%Net onboard and other revenue yields . . . . . . . . . . . . . . . . . . . . . . . . $ 43.48 $ 45.45 $ 42.90% increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 5.9%

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Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividingthe gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows (dollars in millions,except costs per ALBD):

Years Ended November 30,

2015

2015ConstantDollar 2014

Cruise operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,292 $ 9,767 $ 10,261Cruise selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . 2,058 2,168 2,046

Gross cruise costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,350 11,935 12,307Less cruise costs included above

Commissions, transportation and other . . . . . . . . . . . . . . . . . . . . . . . (2,161) (2,324) (2,299)Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (526) (549) (519)Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) (30) (18)Gains on ship sales and ship impairments, net . . . . . . . . . . . . . . . . 8 8 (2)

Net cruise costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,646 9,040 9,469Less fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,249) (1,249) (2,033)

Net cruise costs excluding fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,397 $ 7,791 $ 7,436

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Gross cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146.81 $ 154.39 $ 161.93% decrease vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9.3)% (4.7)%Net cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 111.83 $ 116.94 $ 124.59% decrease vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.2)% (6.1)%Net cruise costs excluding fuel per ALBD . . . . . . . . . . . . . . . . . . . . $ 95.68 $ 100.78 $ 97.84% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2)% 3.0%

Years Ended November 30,

2015

2015ConstantCurrency 2014

Net cruise costs excluding fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,397 $ 7,828 $ 7,436

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Net cruise costs excluding fuel per ALBD . . . . . . . . . . . . . . . . . . . . $ 95.68 $ 101.26 $ 97.84% (decrease) increase vs. prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2)% 3.5%

Adjusted fully diluted earnings per share was computed as follows (in millions, except per share data):

Years Ended November 30,2015 2014

Net incomeU.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,757 $1,216Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 18Gains on ship sales and ship impairments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) 2(a)Unrealized losses on fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 268

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,106 $1,504

Weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 778

Earnings per shareU.S. GAAP earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03 0.02Gains on ship sales and ship impairments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) -(a)Unrealized losses on fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.42 0.35

Adjusted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.70 $ 1.93

(a) Represents impairment charges of $22 million for Grand Celebration and $31 million for Grand Holiday,partially offset by gains of $37 million from the sale of Costa Voyager and $14 million from the sale ofOcean Princess.

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Net cruise revenues decreased slightly by $50 million, to $12.8 billion in 2015 from $12.9 billion in 2014.

The slight decrease in net cruise revenues was caused by:

• $695 million – 2015 foreign currency translational impact and• $141 million – 2015 foreign currency transactional impact.

These decreases were partially offset by:

• $565 million – 4.3% increase in constant currency net revenue yields and• $221 million – 1.7% capacity increase in ALBDs.

The 4.3% increase in net revenue yields on a constant currency basis was due to a 3.8% increase in net passengerticket revenue yields and a 5.9% increase in net onboard and other revenue yields.

The 3.8% increase in net passenger ticket revenue yields was caused by a 5.9% increase from our North Americabrands and a slight increase from our EAA brands. The increase in net passenger ticket revenue yields was drivenprimarily by improvements in Alaskan and Caribbean itineraries for our North America brands.

The 5.9% increase in net onboard and other revenue yields was caused by a 7.1% increase from our NorthAmerica brands and a 2.2% increase from our EAA brands.

Gross cruise revenues decreased by $181 million, or 1.2%, to $15.5 billion in 2015 from $15.7 billion in 2014 forlargely the same reasons as discussed above.

Net cruise costs excluding fuel decreased slightly by $39 million and remained at $7.4 billion in 2015 and 2014.

The slight decrease in net cruise costs excluding fuel was caused by:

• $395 million – 2015 foreign currency translational impact and• $37 million – 2015 foreign currency transactional impact.

These decreases were partially offset by:

• $265 million – 3.5% increase in constant currency net cruise costs excluding fuel per ALBD and• $128 million – 1.7% capacity increase in ALBDs.

The 3.5% increase in constant currency net cruise costs excluding fuel per ALBD were primarily due to:

• $106 million – higher dry dock expenses as a result of higher number of dry-dock days and• $88 million – higher selling, general and administrative expenses.

Fuel costs decreased by $784 million, or 39%, to $1.2 billion in 2015 from $2.0 billion in 2014.

This decrease was caused by:

• $776 million – lower fuel prices and• $43 million – lower fuel consumption per ALBD.

These decreases in fuel costs were partially offset by our 1.7% capacity increase in ALBDs, which accounted for$35 million.

Gross cruise costs decreased by $957 million, or 7.8%, to $11.4 billion in 2015 from $12.3 billion in 2014 forprincipally the same reasons as discussed above.

Liquidity, Financial Condition and Capital Resources

Our primary financial goals are to profitably grow our cruise business and increase our ROIC, reaching doubledigit returns in the next two to three years, while maintaining a strong balance sheet. Our ability to generatesignificant operating cash flows allows us to internally fund our capital investments. We are committed to

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returning free cash flows to our shareholders in the form of dividends and/or share buybacks. In addition, we arecommitted to maintaining our strong investment grade credit ratings. Other objectives of our capital structurepolicy are to maintain a sufficient level of liquidity with our available cash and cash equivalents and committedfinancings for immediate and future liquidity needs, and a reasonable debt maturity profile that is spread out overa number of years.

Based on our historical results, projections and financial condition, we believe that our future operating cashflows and liquidity will be sufficient to fund all of our expected capital projects including shipbuildingcommitments, ship improvements, debt service requirements, working capital needs and other firm commitmentsover the next several years. We believe that our ability to generate significant operating cash flows and ourstrong balance sheet as evidenced by our investment grade credit ratings provide us with the ability in mostfinancial credit market environments to obtain debt financing, as needed. Our future operating cash flows and ourability to issue debt can be adversely impacted by numerous factors outside our control including, but not limitedto, those noted under Item 5. Risk Management and/or Mitigation of Principal Risks within this Strategic Report.If our long-term senior unsecured credit ratings were to be downgraded or assigned a negative outlook, ouraccess to and cost of debt financing may be negatively impacted.

At November 30, 2015, we had a working capital deficit of $4.5 billion. This deficit included $3.3 billion ofcurrent customer deposits, which represent the passenger revenues already collected for cruises departing overthe next twelve months and, accordingly, are substantially more like deferred revenue balances rather than actualcurrent cash liabilities. Our November 30, 2015 working capital deficit also included $1.4 billion of current debtobligations. We continue to generate significant cash from operations and have a strong balance sheet. Thisstrong balance sheet provides us with the ability to refinance our current debt obligations before, or as theybecome due, in most financial credit market environments. We also have our revolving credit facilities availableto provide long-term rollover financing should the need arise, or if we choose to do so. After excluding currentcustomer deposits and current debt obligations from our November 30, 2015 working capital deficit balance, ouradjusted working capital was $141 million. Our business model, along with our strong balance sheet andunsecured revolving credit facilities, allows us to operate with a working capital deficit and still meet ouroperating, investing and financing needs. We believe we will continue to have working capital deficits for theforeseeable future.

At November 30, 2014, the U.S. dollar was $1.56 to sterling, $1.25 to the euro and $0.85 to the Australian dollar.Had these November 30, 2014 currency exchange rates been used to translate our November 30, 2015 non-U.S.dollar functional currency operations’ assets and liabilities instead of the November 30, 2015 U.S. dollarexchange rates of $1.50 to sterling, $1.06 to the euro and $0.72 to the Australian dollar, our total assets wouldhave been higher by $2.0 billion and our total liabilities would have been higher by $1.2 billion.

Sources and Uses of Cash

Operating Activities

Our business provided $4.5 billion of net cash from operations during 2015, an increase of $1.1 billion, or 32%,compared to $3.4 billion in 2014. This increase was caused by more cash being provided from our operatingresults and an increase in customer deposits.

Investing Activities

During 2015, net cash used in investing activities was $2.5 billion. This was substantially all due to ourexpenditures for capital projects, of which $981 million was spent on our ongoing new shipbuilding program,primarily for P&O Cruises (UK)’s Britannia. In addition to our new shipbuilding program, we had capitalexpenditures of $1.0 billion for ship improvements and replacements and $301 million for informationtechnology, buildings and improvements and other assets. Furthermore, in 2015 we received cash installments of$25 million from the sales of Ocean Princess, Seabourn Legend and Seabourn Spirit. Finally, we paid $219million of fuel derivative settlements.

During 2014, our expenditures for capital projects were $2.6 billion, of which $1.5 billion was spent on ourongoing new shipbuilding program, substantially for Regal Princess and Costa Diadema. In addition to our newshipbuilding program, we had capital expenditures of $754 million for ship improvements and replacements and$305 million for information technology, buildings and improvements, and other assets. Furthermore, in 2014 wesold Costa Voyager and received $42 million in cash proceeds.

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Financing Activities

During 2015, net cash used in financing activities of $942 million was substantially due to the following:

• repaid a net $633 million of short-term borrowings in connection with our availability of, and needsfor, cash at various times throughout the period;

• repaid $1.2 billion of long-term debt, including an early repayment of $225 million under an exportcredit facility;

• issued $1.3 billion of publicly-traded notes, which net proceeds are being used for general corporatepurposes;

• borrowed $697 million of long-term debt under an export credit facility and a bank loan;• paid cash dividends of $816 million;• purchased $533 million of shares of Carnival Corporation common stock in open market transactions

of which $276 million were purchased under our Repurchase Program and $257 million werepurchased under our Stock Swap Program and

• sold $264 million of treasury stock under our Stock Swap program.

During 2014, net cash used in financing activities of $1.0 billion was substantially due to the following:

• borrowed a net $617 million of short-term borrowings in connection with our availability of, and needsfor, cash at various times throughout the year;

• repaid $2.5 billion of long-term debt, including early repayments of $839 million of three bank loansand $590 million of two export credit facilities;

• borrowed $1.6 billion of new long-term debt under two export credit facilities and three bank loans and• paid cash dividends of $776 million.

Future Commitments and Funding Sources

At November 30, 2015, our contractual cash obligations, including ship construction contracts entered intothrough February 19, 2016, were as follows (in millions):

Payments Due by

2016 2017 2018 2019 2020 Thereafter Total

Recorded Contractual CashObligations

Short-term borrowings . . . . . . . . . . . . . . $ 30 $ 30Long-term debt (a) . . . . . . . . . . . . . . . . . . 1,344 $ 1,007 $ 1,477 $ 1,400 $ 1,110 $ 2,419 8,757Other long-term liabilities reflected

on the balance (b) . . . . . . . . . . . . . . . . - 366 280 58 51 161 916Unrecorded Contractual Cash

ObligationsShipbuilding (c) . . . . . . . . . . . . . . . . . . . . 1,950 1,288 2,459 3,014 2,388 - 11,099Operating leases (c) . . . . . . . . . . . . . . . . . 52 41 34 31 29 203 390Port facilities and other (c) . . . . . . . . . . 211 200 161 104 102 793 1,571Purchase obligations (d) . . . . . . . . . . . . 915 81 39 14 10 13 1,072Fixed rate interest payments (e) . . . . . 173 145 121 106 88 287 920Floating rate interest payments (e) . . 72 43 61 50 59 85 370

Total Contractual CashObligations (f) . . . . . . . . . . . . . . . . . . . $ 4,747 $ 3,171 $ 4,632 $ 4,777 $ 3,837 $ 3,961 $ 25,125

(a) Our long-term debt has a weighted-average maturity of 4.1 years. See Note 6 – “Unsecured Debt” of the DLCFinancial Statements, which are included in Annex 1, but do not form part of these Carnival plc financialstatements for additional information regarding these debt obligations.

(b) Represents cash outflows for certain of our long-term liabilities that could be reasonably estimated. Theprimary outflows are for estimates of our compensation plans’ obligations, crew and guest claims, uncertainincome tax position liabilities and certain deferred income taxes. Customer deposits and certain otherdeferred income taxes have been excluded from the table because they do not require a cash settlement in thefuture.

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(c) Our shipbuilding contractual obligations are legal commitments and, accordingly, cannot be canceled withoutcause by the shipyards or us, and such cancellation will subject the defaulting party to significant contractualliquidating damage payments. See Note 7 – “Commitments” of the DLC Financial Statements, which areincluded in Annex 1, but do not form part of these Carnival plc financial statements for additionalinformation regarding these contractual cash obligations.

(d) Represents legally-binding commitments to purchase inventory and other goods and services made in thenormal course of business to meet operational requirements. Many of our contracts contain clauses that allowus to terminate the contract with notice, either with or without a termination penalty. Termination penaltiesare generally an amount less than the original obligation. Historically, we have not had any significantdefaults of our contractual obligations or incurred significant penalties for their termination.

(e) Fixed rate interest payments represent cash outflows for fixed interest payments, including interest swappedfrom a floating rate to a fixed rate. Floating rate interest payments represent forecasted cash outflows forinterest payments on floating rate debt, including interest swapped from a fixed rate to a floating rate, usingthe November 30, 2015 forward interest rates for the remaining terms of the loans. Floating rate interestpayments also include debt issuance costs that are payable upon drawing under most of our cancellableexport credit facilities and facility fees on our revolving credit facilities.

(f) Amounts payable in foreign currencies, which are principally the euro, sterling and Australian dollars, arebased on the November 30, 2015 exchange rates.

As of November 30, 2015, our total annual capital expenditures consist of ships under contract for construction,including ship construction contracts entered into through February 19, 2016, estimated improvements to existingships and shoreside assets and are expected to be $3.5 billion in 2016, $2.7 billion in 2017, $3.8 billion in 2018,$4.4 billion in 2019 and $3.8 billion in 2020.

The year-over-year percentage increase in our annual capacity is currently expected to be 3.5% in 2016, 3.7% in2017, 2.4% in 2018, 5.3% in 2019 and 7.2% in 2020. These percentage increases are expected to result primarilyfrom contracted new ships entering service.

Our Boards of Directors have authorized, subject to certain restrictions, the repurchase of up to an aggregate of$1.0 billion of Carnival Corporation common stock and/or Carnival plc ordinary shares under the RepurchaseProgram. On January 28, 2016, the Boards of Directors approved a modification of the Repurchase Programauthorization that increased the remaining $213 million of authorized repurchases by $1.0 billion. FromJanuary 28, 2016, through February 19, 2016, we repurchased 8.3 million shares of Carnival Corporationcommon stock for $369 million under the Repurchase Program. Accordingly, at February 19, 2016, theremaining availability under the Repurchase Program was $843 million. See Note 17 – “Reserves and OtherEquity Activity” of the Carnival plc financial statements for a further discussion of the Repurchase Program.

In addition to the Repurchase Program, the Boards of Directors authorized, in October 2008, the repurchase of upto 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares ofCarnival Corporation common stock under the Stock Swap programs. Under the Stock Swap programs, we sellshares of Carnival Corporation common stock and/or Carnival plc ordinary shares, as the case may be, and use aportion of the net proceeds to purchase an equivalent number of Carnival plc ordinary shares or shares ofCarnival Corporation common stock, as applicable. We use the Stock Swap programs in situations where we canobtain an economic benefit because either Carnival Corporation common stock or Carnival plc ordinary sharesare trading at a price that is at a premium or discount to the price of Carnival plc ordinary shares or CarnivalCorporation common stock, as the case may be. Any realized economic benefit under the Stock Swap programsis used for general corporate purposes, which could include repurchasing additional stock under the RepurchaseProgram. Depending on market conditions and other factors, we may repurchase shares of Carnival Corporationcommon stock and/or Carnival plc ordinary shares under the Repurchase Program and the Stock Swap programsconcurrently.

During 2014, no Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchasedunder the Stock Swap programs. During 2015, under the Stock Swap programs, Carnival Investments Limited(“CIL”) sold 5.1 million of Carnival plc ordinary shares for net proceeds of $264 million. Substantially all of thenet proceeds from these sales were used to purchase 5.1 million shares of Carnival Corporation common stock.Carnival Corporation sold these Carnival plc ordinary shares owned by CIL only to the extent it was able torepurchase shares of Carnival Corporation common stock in the U.S. market on at least an equivalent basis.During 2015, no Carnival Corporation common stock was sold or Carnival plc ordinary shares were repurchasedunder the Stock Swap program.

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From December 1, 2015 through February 19, 2016, CIL sold 0.9 million ordinary shares of Carnival plc throughits sales agent for net proceeds of $40 million. Substantially all of the net proceeds of these sales were used topurchase 0.9 million shares of Carnival Corporation common stock. Accordingly, at February 19, 2016 theremaining availability under the Stock Swap programs was 18.1 million Carnival plc ordinary shares and 26.0million shares of Carnival Corporation common stock.

Finally, the Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swapprogram require annual shareholder approval. The existing shareholder approval is limited to a maximum of21.5 million ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annualgeneral meeting or July 13, 2016. See Note 17 – “Reserves and Other Equity Activity” of the Carnival plcfinancial statements.

At November 30, 2015, we had liquidity of $10.4 billion. Our liquidity consisted of $1.2 billion of cash and cashequivalents, which excludes $226 million of cash used for current operations, $2.8 billion available forborrowing under our revolving credit facilities, and $6.5 billion under our committed future financings, which arecomprised of ship export credit facilities. Of this $6.5 billion, $1.5 billion is available for funding in 2016, $0.8billion in 2017, $1.8 billion in 2018, $0.8 billion in 2019 and $1.6 billion in 2020. At November 30, 2015, ourrevolving credit facilities are scheduled to mature in 2020. These commitments are from numerous large andwell-established banks and export credit agencies, which we believe will honor their contractual agreements withus.

Substantially all of our debt agreements contain financial covenants as described in Note 6 – “Unsecured Debt”of the DLC Financial Statements, which are included in Annex 1, but do not form part of these Carnival plcfinancial statements. At November 30, 2015, we were in compliance with our debt covenants. In addition, basedon, among other things, our forecasted operating results, financial condition and cash flows, we expect to be incompliance with our debt covenants for the foreseeable future. Generally, if an event of default under any debtagreement occurs, then pursuant to cross default acceleration clauses, substantially all of our outstanding debtand derivative contract payables could become due, and all debt and derivative contracts could be terminated.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingentinterests, certain derivative instruments and variable interest entities that either have, or are reasonably likely tohave, a current or future material effect on our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our hedging strategies and market risks, see the discussion below and Note 11 – “Fair ValueMeasurements, Derivative Instruments and Hedging Activities” of the DLC Financial Statements, which areincluded in Annex 1, but do not form part of these Carnival plc financial statements.

Foreign Currency Exchange Rate Risks

Operational Currency Risks

We have foreign operations that have functional currencies other than the U.S. dollar, which result in foreigncurrency translational impacts. We execute transactions in a number of currencies different than their functionalcurrencies, principally the euro, sterling and Australian, Canadian and U.S. dollars, which result in foreigncurrency transactional impacts. Based on a 10% hypothetical change in all currency exchange rates that wereused in our December 18, 2015 guidance, we estimate (including both the foreign currency translational andtransactional impacts) that our adjusted diluted earnings per share December 18, 2015 guidance would change bythe following:

• $0.30 per share on an annualized basis for 2016 and• $0.04 per share for the first quarter of 2016.

Investment Currency Risks

As of November 30 2015, we have foreign currency swaps and forwards of $387 million and $43 million,respectively, which settle through September 2019 and July 2017, respectively. These foreign currency swapsand forwards are designated as hedges of our net investments in foreign operations, which have a euro-denominated functional currency, thus partially offsetting the foreign currency exchange rate risk. Based on a10% hypothetical change in the U.S. dollar to euro exchange rate as of November 30, 2015, we estimate thatthese foreign currency swaps’ and forwards’ fair values would change by $44 million, which would be offset bya corresponding change of $44 million in the U.S. dollar value of our net investments.

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Newbuild Currency Risks

In 2015, we entered into foreign currency zero cost collars that are designated as cash flow hedges for a portionof Majestic Princess’ and Seabourn Encore’s euro-denominated shipyard payments. The Majestic Princess’collars mature in March 2017 at a weighted-average ceiling of $590 million and a weighted-average floor of$504 million. Seabourn Encore’s collars mature in November 2016 at a weighted-average ceiling of $221 millionand a weighted-average floor of $185 million. If the spot rate is between the weighted-average ceiling and floorrates on the date of maturity, then we would not owe or receive any payments under these collars. AtNovember 30, 2015, the estimated fair value of these outstanding foreign currency zero cost collars was a$26 million liability. Based on a 10% hypothetical increase or decrease in the November 30, 2015 U.S. dollar toeuro exchange rates, we estimate the fair value of our foreign currency zero cost collars’ liability would decrease$32 million or increase $43 million, respectively.

At February 19, 2016, our remaining newbuild currency exchange rate risk relates to euro-denominated newbuildcontract payments, which represent a total unhedged commitment of $2.0 billion and substantially relates toCarnival Cruise Line, Holland America Line, P&O Cruises (Australia) and Seabourn newbuilds scheduled to bedelivered through 2019. The functional currency cost of each of these ships will increase or decrease based onchanges in the exchange rates until the payments are made under the shipbuilding contract, or we enter into aforeign currency hedge. Based on a 10% hypothetical change in the U.S. dollar to euro exchange rates as ofNovember 30, 2015, the unpaid cost of these ships would have a corresponding change of $194 million.

Interest Rate Risks

At November 30, 2015, we have interest rate swaps that have effectively changed $500 million of fixed rate debtto U.S. dollar LIBOR-based floating rate debt and $568 million of EURIBOR-based floating rate euro debt tofixed rate euro debt. Based on a 10% hypothetical change in the November 30, 2015 market interest rates, the fairvalue of all our debt and related interest rate swaps would change by $77 million. In addition, based on a 10%hypothetical change in the November 30, 2015 market interest rates, our annual interest expense on floating ratedebt, including the effect of our interest rate swaps, would change by an insignificant amount. Substantially all ofour fixed rate debt can only be called or prepaid by incurring additional costs.

Fuel Price Risks

Our exposure to market risk for changes in fuel prices substantially all relates to the consumption of fuel on ourships. We expect to consume approximately 3.3 million metric tons of fuel in 2016. Based on a 10% hypotheticalchange in our December 18, 2015 guidance’s, forecasted average fuel price, we estimate that our 2016 fuelexpense, excluding the effect of zero cost collar fuel derivatives, would change by $80 million.

We mitigate a portion of our economic risk attributable to potential fuel price increases through the use of Brentzero cost collars. The actual fuel we use on our ships is marine fuel. See Note 11 – “Fair Value Measurements,Derivative Instruments and Hedging Activities” of the DLC Financial Statements, which are included inAnnex 1, but do not form part of these Carnival plc financial statements for additional discussion of our fuelderivatives.

At November 30, 2015, our fuel derivatives cover a portion of our estimated fuel consumption through 2018. AtNovember 30, 2015, the estimated fair value of our outstanding fuel derivative contracts was a net liability of$561 million. Based on a 10% hypothetical increase or decrease in the November 30, 2015 Brent forward pricecurve, we estimate the fair value of our fuel derivatives’ net liability would decrease $101 million or increase$108 million, respectively. In addition, a 10% hypothetical change in our December 18, 2015 guidance’s, Brentprice would result in a $0.04 per share change in realized losses on fuel derivatives for 2016 and a $0.01 pershare change for the 2016 first quarter.

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4. Internal Control and Risk Assessment

BOARDS OF DIRECTORSOverall responsibility for strategy and risk

management programs.

HESS COMMITTEESResponsible for operational

and compliance controlsrelated to Health,

Environment, Safety, Securityand Sustainability. Overseesmanagement’s processes to

identify and quantify principalrisks.

RISK ADVISORY ANDASSURANCE SERVICES

Responsible for providing assurance that controlsrelated to financial, operational, compliance andstrategic risks are well designed and operating

effectively.

Facilitates reporting on principal risks andmanagement capabilities.

LEADERSHIP TEAMResponsible for managing the business and

providing the Board of Directors andCommittees with appropriate information to

enable them to carry out theirresponsibilities.

Note: The BOD’s Compensation and Nominating &Governance Committees are also responsible for some of thestrategy and risk management programs.

AUDIT COMMITTEESResponsible for financial controlsand compliance with non-HESS

related legal and regulatoryrequirements. Oversees

management’s processes to identifyand quantify principal risks.

Monitors and reviews the internaland external audit process and

financial reporting.

Carnival Corporation & plc’s Boards of Directors

The Boards of Directors (“BODs”) have overall responsibility for determining the strategic direction of CarnivalCorporation & plc and the nature and extent of the risk assumed by it. The BODs have carried out a robustassessment to ensure that these principal risks, including those that would threaten its business model, futureperformance, solvency or liquidity are effectively managed and/or mitigated to help ensure Carnival Corporation &plc is viable. As a result of this assessment the BODs have identified the nine principal risks and their managementand/or mitigation as listed in Item 5. Risk Management and/or Mitigation of Principal Risks within this StrategicReport. The BODs oversight includes briefings by management, review of audit results and corrective actions, andthe results of risk assessment and risk monitoring activities. The framework above illustrates the interaction betweenthe BODs, its Committees and Carnival Corporation & plc management in order to continuously and annuallyassess, manage and/or mitigate risks. In this regard, the BODs delegate certain risk management activities to all itsCommittees, but principally to the Audit and HESS Committees as follows:

Audit Committees

The Audit Committees are responsible for oversight of Carnival Corporation & plc financial controls andcompliance activities and oversees management’s processes to identify and quantify principal risks. They monitorCarnival Corporation & plc’s principal financial risks and non-HESS operational and compliance risks identified bythe risk assessment processes and report their findings to the BODs. They are also responsible for reviewing indetail the effectiveness of Carnival Corporation & plc’s system of internal control policies, and procedures for theidentification, assessment and reporting of risk, including identifying new risks as they arise. They review and makerecommendations arising from management reports on the effectiveness of internal controls and risk managementsystems. In addition, the Audit Committees review the historical audit coverage, the audit plan for the upcomingyear and results of any testing carried out by Carnival Corporation & plc’s internal audit department, RiskAdvisory & Assurance Services (“RAAS”), and its external auditors. They also review arrangements by whichemployees may confidentially raise concerns about improprieties in Carnival Corporation & plc’s financialreporting and financial controls. Finally, in connection with their risk oversight role, the Audit Committees regularlymeet privately with representatives from Carnival Corporation & plc’s independent auditors and registered certifiedpublic accounting firm, the Chief Audit Officer and the General Counsel.

HESS Committees

The HESS Committees monitor Carnival Corporation & plc’s performance in managing and/or mitigatingprincipal non-financial risks, principally those arising in respect of health, environment, safety and security and

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sustainability and report their findings to the BODs on a regular basis. The HESS Committees also identify newrisks or exposures as they arise. Finally, they oversee management’s processes to identify and quantify principalrisks and review with management the actions required to minimize such risks.

Leadership Team

The Leadership Team, which consists of our most senior executive management, is responsible for having activeplans to strategically manage and/or mitigate the principal financial and non-financial risks identified by thebusiness from the risk assessment processes that are integrated within Carnival Corporation & plc’s operations toensure ongoing viability. Management responsibility for the management and/or mitigation of CarnivalCorporation & plc’s principal financial and non-financial risks is determined by the Leadership Team. Finally,the Leadership Team also identifies new risks as they arise and ensures they are properly reviewed andmonitored.

RAAS

The RAAS department reports directly to the Chairs of the Audit and HESS Committees. RAAS supports theAudit and HESS Committees in fulfilling their governance and oversight responsibilities and are recognized asthe BODs primary partner for providing risk advisory and assurance services. RAAS is responsible for providingassurance that controls related to financial (including the U.S. Sarbanes-Oxley Act (“SOX”)), operational,compliance and strategic risks are well designed and operate effectively. This is achieved through theperformance of annual audits and other reviews as requested by senior executive management and the Audit andHESS Committees. RAAS also conducts annual HESS audits of each brand’s head office and of each ship inCarnival Corporation & plc’s fleet. In addition, RAAS facilitates reporting on principal risks and howmanagement manages and/or mitigates these risks. RAAS ensures their annual audit plan is well aligned withstrategic goals and principal risks. During 2015, RAAS worked closely with the BODs and senior executivemanagement to re-define the Enterprise Risk Management program for value and success.

Senior management receives periodic information regarding internal control issues arising at the business units.The primary focus of this aspect of the control process is the RAAS Department that is responsible formonitoring the process, ensuring that issues common to more than one business unit are identified and that allrelevant matters are brought to the attention of the BODs as a whole. In carrying out its functions, the RAASDepartment is supported by the Global Accounting and Reporting Services and Corporate Legal Departments, aswell as the CEO and the Chief Financial Officer (the “Certifying Officers”). The Certifying Officers are requiredby rules of the SEC to file written certifications on a quarterly basis certifying, among other items, that they havedisclosed to the auditors and the Audit Committees all significant deficiencies and material weaknesses in thedesign or operation of internal control over financial reporting which are reasonably likely to adversely affectCarnival Corporation & plc’s ability to record, process, summarize and report financial information and anyfraud, whether or not material, that involves management or other employees who have a significant role inCarnival Corporation & plc’s internal control over financial reporting.

Internal control and risk management within Carnival Corporation & plc’s business units is an ongoing processembedded in each of the operations. It is designed to identify, evaluate and manage the principal risks faced bythe units. A robust system of internal controls designed to be capable of responding quickly to evolving risks inthe business has been established, comprising procedures for the prompt reporting of significant and materialinternal control deficiencies together with the appropriate remedial actions.

Carnival Corporation & plc has adopted the Committee of Sponsoring Organizations of the TreadwayCommission (“COSO”) guidance for implementing its internal controls based on the criteria established in the2013 framework as part of our SOX compliance plan. COSO is considered to be the model internal controlframework and references the same internal control objectives and components as are used by the 2014 revisedUK Corporate Governance Code in assessing the effectiveness of a company’s risk and control processes.

The system of internal control was in place throughout fiscal 2015 and has continued in place up to the date ofapproval of this Strategic Report. The system is designed to manage rather than eliminate the risk of failure toachieve business objectives. The BODs confirm that they have performed their annual review of its effectivenessand that it is in compliance with the 2014 revised UK Corporate Governance Code. The BODs review of thesystem of internal controls has not identified any significant failings or weaknesses, and therefore, no remedialactions are required.

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5. Risk Management and/or Mitigation of Principal Risks.

You should carefully consider the specific principal risk factors set forth below and the other informationcontained within this Strategic Report, as these are important factors that could cause our actual results,performance or achievements to differ materially from our expected or historical results. Some of the statementsin this item and elsewhere within this Strategic Report and in the Carnival plc Financial Statements are “forward-looking statements.” For a discussion of those statements and of other factors to consider see the “CautionaryNote Concerning Factors That May Affect Future Results” within this Strategic Report.

Š Incidents, such as ship incidents, security incidents, the spread of contagious diseases and threats thereof,adverse weather conditions or other natural disasters and the related adverse publicity affecting ourreputation and the health, safety, security and satisfaction of guests and crew could have an adverse effecton our sales and profitability.

The operation of cruise ships, hotels, land tours, port and related commercial facilities and shore excursionsinvolve the risk of incidents, including those caused by the improper operation or maintenance of ships,motorcoaches and trains; guest and crew illnesses, such as from the spread of contagious diseases; mechanicalfailures, fires and collisions and the resulting costs incurred on emergency ship repairs; repair delays;groundings; navigational errors; oil spills and other maritime and environmental mishaps; missing passengersand other incidents at sea or while in port or on land, which may cause injury and death, guest and crewdiscomfort and the alteration of itineraries or cancellation of a cruise or series of cruises or tours. Although ouruncompromising commitment to the safety and comfort of our guests and crew is paramount to the success of ourbusiness, our ships have been involved in accidents and other incidents in the past. We may experience similar orother incidents in the future. These types of incidents may bring into question guest and crew health, safety,security and satisfaction and may adversely affect our brands’ reputations and demand for our brands, andcruising in general, and may affect our sales and profitability, may result in additional costs to our business,litigation against us and increasing government or other regulatory oversight.

In particular, our ability to effectively and efficiently operate shipboard and shoreside activities may be impactedby widespread public health issues/illnesses or health warnings resulting in, among other things, reduced demandfor cruises and cruise and ship charter cancellations and employee absenteeism that could have an adverse effecton our sales and profitability. For example, a severe outbreak of the influenza virus or some other pandemiccould, among other things, disrupt our ability to embark/disembark passengers and crew, require changes tocruise itinerary, disrupt air and ground travel to and from ports, increase costs for prevention and treatment andadversely affect our supply chain and distribution systems. This could also adversely impact cruise demand inareas unaffected by such an outbreak.

In addition, as mentioned above, our ships are subject to the risks of mechanical failures and accidents, for whichwe have had to incur repair and equipment replacement expenditures. If these occur in the future, we may beunable to procure spare parts or new equipment when needed or make repairs without incurring significantexpenditures or suspension of service. A significant performance deficiency or problem on any one or more ofour ships could have an adverse effect on our financial condition and results of operations.

Our cruise ships, hotels, land tours, port and related commercial facilities, shore excursions and other serviceproviders may be impacted by adverse weather patterns or other natural disasters, such as hurricanes,earthquakes, floods, fires, tornados, tsunamis, typhoons and volcanic eruptions. These events could result in,among other things, increased port related and other costs. It is possible that we could be forced to alteritineraries or cancel a cruise or a series of cruises or tours due to these or other factors, which would have anadverse effect on our sales and profitability.

The frequency of extreme weather events such as hurricanes, floods and typhoons may not only cause disruption,alteration, or cancellation of cruises but may also adversely impact commercial airline flights, other transport and shoreexcursion activities or prevent our guests from electing to cruise altogether. Such extreme weather events may alsodisrupt the supply of provisions, fuel and shore power, and may limit our ability to safely embark and disembark ourguests. In addition, these extreme weather conditions could result in increased wave and wind activity, which wouldmake it more challenging to sail and dock our ships and could cause sea/motion sickness among guests and crew.These events could have an adverse impact on the safety and satisfaction of cruising and could have an adverse impacton our sales and profitability. Additionally, these extreme weather conditions could cause property damage to ourships, port and related commercial and business facilities and other assets and impact our ability to provide our cruiseproducts and services as well as to obtain insurance coverage for operations in such areas at reasonable rates.

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Incidents involving cruise ships, in particular our cruise ships, and media coverage thereof, as well as adversemedia publicity concerning the cruise vacation industry in general, or unusual weather patterns or other naturaldisasters or disruptions, such as hurricanes and earthquakes, could impact demand for our cruises. In addition,any incidents which impact the travel industry more generally may negatively impact guests’ ability or desire totravel to or from our ships or interrupt our ability to obtain services and goods from key vendors in our supplychain. Any of the foregoing could have an adverse impact on our sales and profitability.

Maintaining a good reputation is critical to our business. Reports and media coverage of ship incidents at sea orwhile in port, including missing guests, improper conduct by our employees, guests or agents, crimes, dissatisfiedguests, crew and guest illnesses, such as incidents of stomach flu, parasitic outbreaks or other contagiousdiseases, security breaches, terrorist threats and attacks and other adverse events can result in negative publicity,which could lead to a negative perception regarding the safety of our ships and the satisfaction of our guests. Inaddition, negative publicity regarding adverse environmental impacts of cruising, such as climate change and oilspills, could diminish our reputation. The considerable expansion in the use of social media over recent years hasincreased the ways in which our reputation can be impacted, and the speed with which it can occur. Anything thatdamages our reputation, whether or not justified, could have an adverse impact on demand, which could lead toprice reductions and a reduction in our sales and profitability.

Examples of how we manage and/or mitigate this principal risk:

Governance and policy

➣ We have established HESS Committees to assist the BODs in fulfilling their responsibility tosupervise and monitor our health, environment, safety and security-related policies, programs andinitiatives at sea and ashore and compliance with related legal and regulatory requirements. TheHESS Committees and our management team review principal risks or exposures and associatedmitigation plans.

➣ We are identifying and standardizing best-practice policies and procedures in HESS disciplinesacross the entire organization and we share them with our principal competitors in the cruiseindustry.

➣ We are further enhancing our processes for auditing ship and shore-based operations andcontinuously improving our HESS performance throughout our operations and regularly performshoreside and shipboard audits and take appropriate action when deficiencies are identified.

➣ We develop and implement effective and verifiable management systems to fulfill our HESScommitments, and identify those employees responsible for managing HESS and sustainabilityprograms and ensure that there are clear lines of accountability.

➣ We align our management compensation with our HESS performance.

Operations

Overall

➣ We have the ability to change our ship itineraries to mitigate contagious diseases, security andweather-related risks.

➣ We have established a proactive public communications program to help mitigate the adverseimpacts from incidents.

➣ We have ship compliance officers who train, monitor and report on compliance with our shipoperational and regulatory policies and procedures.

➣ We provide regular HESS support, training, guidance and information to guests, employees andothers working on our behalf.

➣ We report HESS incidents and investigate when appropriate, in order to take action to preventrecurrence.

➣ We maintain insurance on our ship’s hull and machinery and also for other liabilities resultingfrom ship and other incidents.

Health

➣ We regularly clean and sanitize our ships before and during a cruise and have implementedenhanced guest and crew health-screening protocols to curtail the spread of contagious diseases.

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Environment

➣ We identify the aspects of our business that impact the environment and continue to takeappropriate action to minimize that impact.

Safety and Training

➣ We have enhanced our procedures, systems and training to further mitigate the risk of engineroom fires.

➣ We have expanded and accelerated the training of our bridge and engine room officers inmaritime-related best practices at our global training facilities in Almere, the Netherlands.

➣ We have standardized bridge and engine resource management procedures on our ships and haveexpanded our existing oversight function to monitor bridge and engine room operations.

Security

➣ We identify security-related threats at sea and ashore and set security protocols to mitigate risks,up to and including cancelling port calls.

Š Economic conditions and adverse world events affecting the safety and security of travel, such as civilunrest, armed conflicts and terrorist attacks, may adversely impact the demand for cruises and,consequently, reduce our cruise brands’ net revenue yields and profitability.

Demand for cruises is in part dependent on the underlying perceived or actual economic condition of thecountries from which cruise companies source their guests. Adverse changes in the perceived or actual economicclimate, such as global or regional recessions, higher unemployment and underemployment rates; declines inincome levels; securities, real estate and other market declines and volatility; increasing taxation; higher fuelprices and healthcare costs; more restrictive credit markets; higher interest rates and changes in governmentalregulations, could reduce our potential vacationers’ discretionary incomes, net worth or their consumerconfidence. Consequently, this may negatively affect demand for vacations, including cruise vacations, which area discretionary purchase. Decreases in demand could lead to price reductions which, in turn, could reduce theprofitability of our business.

Demand for cruises and other vacation options has been and is expected to continue to be affected by the public’sattitude towards the safety and security of travel. Factors including, but not limited to, past acts of terrorism,threats of additional terrorist attacks, drug-related violence in Mexico, pirate attacks and vessel seizures off theeast and west coasts of Africa, national government travel advisories, political instability and civil unrest inNorth Africa, the Middle East, the Balkans and elsewhere, geopolitical issues between China and Japan andgeneral concerns over the safety and security aspects of traveling have had a significant adverse impact ondemand and pricing in the travel and vacation industry in the past and may have an adverse impact in the future.Decreases in demand may lead to price reductions, which in turn would reduce our profitability, especially inregions with popular ports-of-call.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ We have a strong balance sheet as evidenced by our investment grade credit ratings, whichprovides us with the ability in most financial market environments to obtain debt financing, asneeded. We also have in excess of $2.5 billion in committed revolving credit facilities through atleast 2020 with some of the strongest banks in the world, as well as almost $6.5 billion incommitted export credit financings available for drawing at the time of the underlying shipdeliveries, between 2016 and 2020.

Operations

➣ We can mitigate some of this risk by redeploying our ships to more profitable regions of the worldbecause of the mobility of our ships.

➣ We have established proactive communication programs to deliver our message to consumers,which helps drive cruise demand.

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Security

➣ We identify security-related threats at sea and ashore and set security protocols to mitigate risks,up to and including cancelling port calls.

Š Changes in and compliance with laws and regulations relating to environment, health, safety, security, taxand anti-corruption under which we operate could adversely impact our profitability.

Some environmental groups have lobbied for more stringent regulation of cruise ships. Some groups have alsogenerated negative publicity about the cruise business and its environmental impact. Various agencies andregulatory organizations have enacted or are considering new regulations or policies, such as stricter emissionlimits to reduce GHG effects, which could adversely impact the cruise industry.

The IMO has amended the MARPOL regulations to reduce emissions from ships. As described in “MaritimeEnvironmental Regulations” as referenced below, these changes will result in reductions in ship SOx emissionsby requiring progressive reductions in the sulfur content in fuel or the use of abatement technologies. Theselimits will be further reduced in designated ECAs, including ECAs that have been or could be proposed in otherprime cruising areas, such as around Japan, the Mediterranean Sea and Mexico. As a result of these amendments,we have elected to install EGCSs on certain of our ships, which enable our SOx emissions to meet the ECArequirements and the 2020 global standard without the use of low sulfur fuel, in all material respects. However, ifthis type of technology is not widely used within the shipping industry it is possible that there could be limitedavailability of high sulfur fuels because of low demand and the cost of such fuel may increase. The increase infuel prices caused by these regulations may impact our other expenses including, but not limited to, crew travel,freight and commodity prices and may have an adverse impact on our profitability.

From time to time initiatives to limit GHG emissions are introduced around the world. For example, numerousbills related to climate change have been introduced in the U.S. Congress, which could adversely impact ourbusiness. While not all are likely to become law, there are indications that additional climate change relatedmandates could be forthcoming, and they may significantly impact our costs, including, among other things,increasing fuel prices, including new taxes on bunker fuel, establishment of costly emissions trading schemes andincreasing newbuild and operational costs.

Environmental laws and regulations or liabilities arising from past or future releases of, or exposure to, hazardoussubstances or vessel discharges, including ballast water and waste disposal, could materially increase our cost ofcompliance or otherwise adversely affect our business, results of operations and financial condition. See Item 2.Business. C. “Our Global Cruise Business – Governmental Regulations – Maritime Regulations” for additionalinformation regarding these regulations.

We are subject to numerous international, national, state and local laws, regulations and treaties related to socialissues, such as, health, safety and security. Failure to comply with these laws, regulations, treaties andagreements could lead to enforcement actions, fines, civil or criminal penalties or the assertion of litigationclaims and damages. These issues are, and we believe will continue to be, an area of focus by the relevantauthorities throughout the world. Accordingly, new legislation, regulations or treaties, or changes thereto, couldimpact our operations and would likely subject us to increased compliance costs in the future. In addition,training of crew may become more time consuming and may increase our operating costs due to increasingregulatory and other requirements.

Furthermore, we are also subject to compliance with income tax laws and regulations and income tax treaties inthe jurisdictions where we operate. We believe that substantially all of the income earned by CarnivalCorporation, Carnival plc and their ship owning or operating subsidiaries qualifies for taxation based on shiptonnage, is exempt from taxation or is otherwise subject to minimal taxes in the jurisdictions where the entitiesare incorporated or do business.

We believe that Panama and the jurisdictions where the ship owning and operating subsidiaries of CarnivalCorporation are formed are equivalent exemption jurisdictions for purposes of Section 883 of the InternalRevenue Code. The laws of Panama and the other jurisdictions where our ships are owned or operated are subjectto change and, in the future, may no longer qualify as equivalent exemption jurisdictions. Moreover, changescould occur in the future with respect to the trading volume or trading frequency of Carnival Corporation shares,affecting Carnival Corporation’s status as a publicly-traded corporation for purposes of Section 883.

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The IRS interpretation of Section 883 could also differ materially from ours. In addition, provisions of theInternal Revenue Code, including Section 883, are subject to legislative change at any time. Accordingly, it ispossible that Carnival Corporation and its ship-owning or operating subsidiaries whose tax exemption is based onSection 883 could lose this exemption.

There is no authority that directly addresses the effect, if any, of a DLC arrangement on the availability ofbenefits under treaties and, accordingly, their application to our operations is not free from doubt. The applicabletreaties may be revoked by either applicable country, replaced or modified with new agreements that treatincome from international operation of ships differently than the agreements currently in force or may beinterpreted by one of its countries differently from us.

If we did not qualify for tonnage tax, exemption, treaties or minimal taxes, or if the laws that provide for thesetax systems were changed, we would have significantly higher income tax expense. In many jurisdictions, thebenefit of tonnage tax or preferential tax regimes would be replaced with taxation at normal statutory rates. In theabsence of Section 883 or an applicable income tax treaty in the U.S., we would be subject to the net income andbranch profits tax regimes of Section 882 and Section 884 of the Internal Revenue Code. In combination, theseprovisions would result in the taxation of our U.S. source shipping income, net of applicable deductions, at acurrent federal corporate income tax rate of up to 35%, state income tax rates would vary and our net after-taxincome would be potentially subject to a further branch profits tax of 30%.

We are subject to the examination of our income tax returns by tax authorities in the jurisdictions where weoperate. There can be no assurance that the outcome from these examinations will not adversely affect our netincome.

As budgetary constraints continue to adversely impact the jurisdictions in which we operate, increases in incomeor other taxes affecting our operations may be imposed. Some social activist groups have lobbied for moretaxation on income generated by cruise companies. Certain groups have also generated negative publicity for us.In recent years, certain members of the U.S. Congress have proposed various forms of legislation that wouldresult in higher taxation on income generated by cruise companies.

Operating internationally also exposes us to numerous and sometimes conflicting legal and regulatoryrequirements such as U.S. and global anti-bribery laws and regulations. In many parts of the world, includingcountries in which we operate, practices in the local business communities might not conform to internationalbusiness standards. We may not be successful in ensuring that our employees and other representatives stationedthroughout the world properly adhere to our policies or applicable laws or regulations. Failure to adhere to ourpolicies or applicable laws or regulations could result in penalties, sanctions, damage to our reputation andrelated costs, which in turn could negatively affect our profitability.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ We have established Audit Committees to assist with the BOD’s oversight of, among other things,our compliance with legal and regulatory requirements (other than HESS matters); theperformance of our internal audit functions and relevant elements of our risk managementprograms. The Audit Committees and our management team review principal risks or exposuresand associated mitigating actions.

➣ We have established HESS Committees to assist the BODs in fulfilling their responsibility tosupervise and monitor our health, environment, safety and security-related policies, programs andinitiatives at sea and ashore and compliance with related legal and regulatory requirements. TheHESS Committees and our management team review principal risks or exposures and associatedmitigating actions.

➣ We have a global risk advisory and assurance function to help ensure financial, operational andcompliance controls are well-designed and operating effectively.

Legal and Regulatory

➣ We have robust global compliance programs to help ensure all our internal and certain externalstakeholders are properly educated about laws and regulations.

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➣ We work with appropriate government authorities to ensure we are in compliance with rules andregulations applicable to our ship and shoreside operations, and we consult with numerousprofessionals and participate in various trade associations to help ensure we are aware, and areable to manage the impact, of potential changes to existing regulations.

➣ We inform policy makers of our positions and make recommendations regarding proposedchanges to existing laws and regulations.

➣ We have all of our shipboard operations and ships regularly audited by the national flag stateauthorities and classification societies and maintain the required certificates of compliance inaccordance with the International Safety Management Code.

➣ We have ship compliance officers who train, monitor and report on compliance with our shipoperational and regulatory policies and procedures.

➣ We monitor our tax obligations and ensure we address our significant obligations.

Š Disruptions and other damages to our information technology and other networks and operations, andbreaches in data security could result in decreases in our net income.

Our ability to increase revenues and control costs, as well as our ability to serve guests most effectively dependsin part on the reliability of our sophisticated technologies and system networks. We use communicationapplications, information technology and other systems to manage our inventory of cabins held for sale and setpricing in order to maximize our revenue yields and to optimize the effectiveness and efficiency of our shoresideand shipboard operations. Possible system outages and the resulting downtime could have adverse consequenceson our ability to run and manage our business. In addition, gaining unauthorized access to digital systems andnetworks for purposes of misappropriating assets or sensitive financial, medical or other personal or businessinformation, corrupting data, causing shoreside or shipboard operational disruptions and other cyber-attack riskscould adversely impact our reputation, guest services and satisfaction, employee relationships, business plans,ship safety and costs. Global companies are repeatedly being targeted to gain access to critical company, guestand other information. In addition, the operation and maintenance of our systems is in some cases dependent onthird-party technologies, systems and service providers for which there is no certainty of uninterruptedavailability or through which hackers could gain access to sensitive information. These potential disruptions andcyber attacks could negatively affect our reputation, customer demand, costs, system availability and pricing forour cruises.

In addition, as the use of the internet expands regulators are working on addressing the risks related to these newtechnologies, globalization and cybersecurity with enhanced regulations. For example, the proposed EuropeanUnion’s General Data Protection Regulation promotes an increased level of protection of personal data and willprovide for enhanced regulatory supervision, which may increase our costs.

Our principal offices are located in Australia, Germany, Italy, the UK and the U.S. Although we have developeddisaster recovery and similar business contingency plans, actual or threatened natural disasters (for example,hurricanes, earthquakes, floods, fires, tornados, tsunamis, typhoons and volcanic eruptions) or similar events inthese locations may have a material impact on our business continuity, reputation and results of operations.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ We have regular Audit and HESS Committees oversight to discuss the risks of cyber-attacks andthe mitigating systems, processes and controls we have in place to address these risks.

➣ We have a global risk advisory and assurance function to help ensure financial, operational andcompliance controls are well-designed and operating efficiently.

➣ We have a strong balance sheet as evidenced by our investment grade credit ratings, whichprovides us with the ability in most financial market environments to obtain debt financing, asneeded. We also have in excess of $2.5 billion in committed revolving credit facilities through atleast 2020 with some of the strongest banks in the world, as well as almost $6.5 billion incommitted export credit financings available for drawing at the time of the underlying shipdelivery, between 2016 and 2020.

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Disruptions

➣ We regularly update and test our business continuity and disaster recovery plans.➣ We have implemented general information technology and application controls that we routinely

test to ensure that they are functioning as designed.➣ We have developed and tested a global information technology cybersecurity incident response

plan that includes processes that integrate technical, legal and communication actions.

Breaches in Security

➣ We implement and maintain security controls to help protect our information technologyapplications, networks and customer and company data by focusing on protection, identification,access and recovery.

➣ We continue to review emerging security threats that may impact our critical systems, data andprocesses.

➣ We continually assess cyber-attack risks to our ship control systems and implement securitycontrols to mitigate them.

Š Ability to recruit, develop and retain qualified personnel could adversely affect our results of operations.

Our success is dependent upon our personnel and our ability to recruit and train high quality employees. We hirea significant number of new crew each year and, thus, our ability to adequately recruit, develop and retain them iscritical to our cruise business. We also rely upon the ability, expertise, judgment, discretion, integrity and goodfaith of our senior management team. We must continue to recruit, develop, retain and motivate management andother employees to enable us to maintain our current business and support our projected growth.

We believe that incidents involving cruise ships and the related adverse media publicity, adverse economicconditions that negatively affect our profitability and overcapacity in the vacation region could also impact ourability to recruit qualified personnel.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ We have established HESS Committees to assist the BODs oversight of, among other things, therecruitment, development and retention of qualified shipboard personnel.

➣ We have established a Compensation Committee to assist the BODs in fulfilling theirresponsibility related to compensation of our senior management.

➣ We have established a Nominations Committee to assist the BODs in fulfilling their responsibilityfor succession planning, high-level recruiting and governance.

Operations

➣ We provide hotel and marine-related training to ensure that our shipboard crew, including officers,have the knowledge and skills to properly perform their jobs, including a world-leading simulationtraining center for our deck and technical officers.

➣ We have strong cadet screening and interviewing programs.➣ We are piloting shipboard compensation programs that align compensation with attainment of

competencies critical to the safe operation of our ships.➣ We seek to employ diverse people and ensure our workplaces provide a supportive environment.➣ We have formalized personnel appraisal processes.➣ We use employee feedback tools to monitor employees’ perspectives and take appropriate actions.➣ We monitor our employee turnover and its underlying causes to understand if there are specific

actions that need to be implemented to reduce turnover.➣ Our executive compensation programs are designed to reward financial results and effective

strategic leadership through the use of both short-term rewards and long-term incentives,including performance-based elements.

➣ We have structured our work processes and incentive compensation plans to reflect a culture thatenables our brands to better align their individual performance with our primary financial goals.

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➣ We seek to provide total compensation that allows us to be competitive in the labor markets inwhich we operate.

➣ Our decentralized structure supports our CEO and management succession planning.

Š Increases in fuel prices may adversely affect our operations, financial condition and liquidity.

Economic, market and political conditions around the world, such as fuel demand, regulatory requirements,supply disruptions and related infrastructure needs, make it difficult to predict the future price and availability offuel. Fuel costs accounted for 13%, 20% and 21% of our cruise operating expenses in 2015, 2014 and 2013,respectively. Future increases in the global price of fuel would increase the cost of our cruise ship operations aswell as some of our other expenses, such as crew travel, freight and commodity prices. Furthermore, volatility infuel prices could have a material adverse effect on our operations, financial condition and liquidity. We may beunable to implement additional fuel conservation initiatives and other best practices or increase ticket prices andcollect fuel supplements, which would help to fully or partially offset these fuel price increases. See risks relatingto environmental laws and regulations, continuing financial viability of air service providers and failures to keeppace with technology below for additional information regarding our fuel risks.

To mitigate a portion of our economic risk attributable to potential fuel price increases, we have established afuel derivatives program. To date under this program, we have bought Brent crude oil (“Brent”) call options andsold Brent put options, collectively referred to as zero cost collars, that establish ceiling and floor prices. Thesederivatives are based on Brent prices whereas the actual fuel used on our ships is marine fuel. Changes in theBrent prices may not show a high degree of correlation with changes in our underlying marine fuel prices. Inaddition, there can be no assurance that our fuel derivatives program will provide a sufficient level of protectionagainst increases in fuel prices or that our counterparties will be able to perform, such as in the case of acounterparty bankruptcy. Assuming the Brent prices remain below the floors of our zero cost collars in 2016,2017 and 2018, realized losses on these zero cost collars will reduce the benefit we would have obtained fromlower fuel prices. Also, the fuel derivative contracts may create significant volatility in our U.S. GAAP earningsdue to volatility in fuel prices over the contracts’ terms.

We believe that our land-based vacation competitors’ operating costs are less affected by fuel price increasesthan cruise companies. Accordingly, fuel price increases may adversely impact cruise companies more than theirland-based competitors.

Certain of our newbuilds entering service in 2018 and thereafter are designed to use LNG as a primary fuelsource. At this time, there is not a spot market for LNG like there is for bunker or marine gas oil and purchasingLNG is usually made through long-term contracts. Further, the LNG distribution infrastructure is in the earlystages of development and there are a limited number of suppliers. In addition, we may be subject to newregulations covering the use and storage of LNG onboard our ships and we may experience difficulties inoperating and maintaining new LNG-based engine technology.

Examples of how we manage and/or mitigate this principal risk:

Consumption

➣ We may implement additional fuel conservation initiatives and increase ticket prices and collectfuel supplements, which would help to fully or partially offset fuel price increases.

➣ We can revise itineraries to reduce fuel consumption.➣ We have established teams to research and implement innovative technologies to reduce fuel

consumption.➣ We are adding new, more fuel-efficient ships to our fleet and are opportunistically disposing of

less fuel efficient ships.➣ We have aligned certain employees’ compensation with fuel efficiency targets.

Pricing

➣ We have established a fuel derivatives program to mitigate a portion of our economic riskattributable to potential fuel price increases.

➣ We expect to have EGCSs installed on approximately 70% of our fleet by the end of 2017, whichwill mitigate the impact of regulations that effectively require the use of low sulfur fuels that arehigher-priced.

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➣ We buy large quantities of fuel from selected suppliers to leverage our purchasing power.➣ We are building cruise ships that are propelled by LNG as an alternative to marine fuel oil.

Š Fluctuations in foreign currency exchange rates could adversely affect our financial results.

We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the U.S.dollar; most significantly, the euro, sterling, Australian and Canadian dollars. We derived 54%, 57% and 56% ofour reported revenues from guests sourced from outside of the U.S. in 2015, 2014 and 2013, respectively,including the impact of changes in foreign currency exchange rates. Because our consolidated financialstatements are presented in U.S. dollars, we must translate revenues and expenses, as well as assets andliabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. We reportcurrency transactions in the functional currencies of our reporting units, excluding fuel which is alwaystransacted and reported in U.S. dollars regardless of the functional currency of the reporting unit. Furthermore,we convert a significant amount of these currencies into U.S. dollars. Therefore, the strengthening of the U.S.dollar against our other major currencies, will adversely affect our U.S. dollar financial results and will reducethe U.S. dollar amount received upon conversion of these currencies into U.S. dollars.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ We net certain exposures to take advantage of natural offsets and also use financial instrumentswhen appropriate.

Operations

➣ We may redeploy our ships to mitigate the unfavorable impacts of changes in foreign currencyexchange rates.

➣ We monitor foreign currency exchange rates and increase ticket and onboard product and serviceprices to offset adverse changes, when possible.

➣ We source guests from different markets based on the relative strength of local currencies toalternative currencies.

➣ We sell/buy foreign currencies throughout the year to average-out our foreign currency exchangeexposures.

Š Misallocation of capital among our ship, joint venture and other strategic investments could adversely affectour financial results.

We believe that having the right number and type of cruise ships for our brands is critical to our success inexisting and developing regions. In the event that we build too many ships or build or refurbish ships that are notaccepted by our guests, our pricing, profitability and liquidity may be negatively impacted. Furthermore, we havemade and may continue to make joint venture and other strategic investments that may not develop as we expect,which also could adversely affect our profitability and liquidity.

Examples of how we manage and/or mitigate this principal risk:

Governance

➣ BODs approval are required for certain transactions as follows:— Material changes to our capital structure;— Guarantees in excess of a defined threshold;— Purchase or sale of ships with a carrying value in excess of a defined threshold;— Capital appropriations in excess of a defined threshold;— Disposal of fixed assets with a carrying value or for a consideration in excess of a defined

threshold.— Major investments including the acquisition or disposal of interests of more than 5% in the

voting shares of any publicly-traded company or the making of any take-over bid and— Entry into any contract (other than procurement contracts for goods and services) with an

aggregate value in excess of a defined threshold;

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➣ We require management to obtain approval from Carnival Corporation & plc’s President and CEOfor all capital appropriation requests in excess of a defined threshold.

➣ We have a three-year Strategic Plan that is reviewed and approved by the BODs.

Operations

➣ We have a three-year Strategic Plan and a Capital Plan that is reviewed and approved by ourLeadership Team.

➣ We use payback periods, return on investment and internal rate of return as key metrics in makingour capital allocation decisions.

➣ We align senior management’s performance-based share awards with company-wide return oninvested capital.

Š Future operating cash flow may not be sufficient to fund future obligations and we may be unable to obtainacceptable financing to enable us to continue to be a viable company.

Our forecasted cash flows from future operations may be adversely affected by various factors, including, but notlimited to, incidents, a weakening economy, adverse changes in laws and regulations, and other factors notedunder these Principal Risk factors. To the extent that we are required, or choose, to fund future cashrequirements, including current and future shipbuilding commitments and debt repayments, from sources otherthan cash flow from operations, available cash and committed external sources of liquidity, including committedship and other financings, we will have to secure such financing from export credit agencies or banks or throughthe offering of debt and equity securities in the public or private markets. There is no guarantee that suchfinancings will be available in the future to fund our future obligations, or that they will be available on termsconsistent with our expectations.

Our access to and the cost of financing will depend on, among other things, conditions in the global financingmarkets, the availability of sufficient amounts of financing and our long-term senior unsecured credit ratings. Ifour investment grade long-term senior unsecured credit ratings were to be downgraded or assigned a negativeoutlook, or general market conditions ascribe higher risk to our rating levels, or our industry, or us, our access toand cost of debt financing may be negatively impacted. Further, the terms of future debt agreements couldinclude more restrictive covenants, which may restrict our business operations.

Our ability to maintain our credit facilities may also be impacted by material changes in our ownership. Morespecifically, we may be required to prepay our debt facilities if a person or group of persons acting in concertgain control of Carnival Corporation & plc, other than the Arison family, including Micky Arison, our Chairmanof the Boards of Directors.

Examples of how we manage and/or mitigate this principal risk:

Operating Cash Flows

➣ We have a three-year Strategic Plan that forecasts our significant cash needs and sources.➣ We monitor and forecast our liquidity and manage our dividend policy, share buybacks and other

metrics to maintain strong investment grade credit ratings.

Financings

➣ At November 30, 2015, we had liquidity of approximately $10.4 billion, which consisted of:— cash and cash equivalents— availability for borrowing under our revolving credit facilities and— availability for future borrowing under our committed ship export credit facilities when the

underlying ships are delivered.➣ We maintain a reasonable debt maturity profile that is spread out over a number of years.➣ We typically enter into a contract to purchase a new ship when there is an underlying ship

financing commitment from the shipyard’s country.➣ We have a strong balance sheet as evidenced by our investment grade credit ratings, which

provides us with the ability in most financial market environments to obtain debt financing, asneeded. We also have in excess of $2.5 billion in committed revolving credit facilities through

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2020 with some of the strongest banks in the world, as well as almost $6.5 billion in committedexport credit financings available for drawing at the time of the underlying ship delivery, between2016 and 2020.

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained within this Strategic Report are “forward-lookingstatements” that involve risks, uncertainties and assumptions with respect to us, including some statementsconcerning future results, outlooks, plans, goals and other events which have not yet occurred. All statementsother than statements of historical facts are statements that could be deemed forward-looking. These statementsare based on current expectations, estimates, forecasts and projections about our business and the industry inwhich we operate and the beliefs and assumptions of our management. We have tried, whenever possible, toidentify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,”“expect,” “goal,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate”and similar expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that may impact, among other things, the forecasting of ouradjusted earnings per share; net revenue yields; booking levels; pricing; occupancy; operating, financing and taxcosts, including fuel expenses; net cruise costs per ALBD; estimates of ship depreciable lives and residualvalues; liquidity; goodwill and ship fair values and outlook.

The principal risks we are exposed to are identified within this Strategic Report and additional non-principal risksare identified in our Form 10-K. This Strategic Report contains important cautionary statements and a discussionof the known factors that we consider could materially affect the accuracy of our forward-looking statements andadversely affect our business, results of operations and financial position. It is not possible to predict or identifyall such risks. There may be additional risks that we consider immaterial or which are unknown.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuingobligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation todisseminate, after the date of this Strategic Report, any updates or revisions to any such forward-lookingstatements to reflect any change in expectations or events, conditions or circumstances on which any suchstatements are based.

6. Going Concern Confirmation.

The assessment of future commitments and funding sources within the Business Review indicates that CarnivalCorporation & plc is well positioned to meet its commitments and obligations for at least 12 months from thedate of this report. In light of these circumstances, the BODs have a reasonable expectation that CarnivalCorporation & plc has adequate resources to continue in operational existence for the foreseeable future.Accordingly, they continue to adopt the going concern basis in preparing the Carnival plc consolidated IFRSfinancial statements.

7. Viability Statement.

The BODs consider that, within the DLC arrangement, the most appropriate presentation of Carnival plc’s viabilityis by reference to the consolidated viability of Carnival Corporation & plc. Accordingly, this Viability Statementthat is prepared in accordance with provision C.2.2 of the 2014 revised UK Corporate Governance Code presentsthe combined group and the BODs have assessed the prospects of Carnival Corporation & plc over a longer periodthan the twelve months required by the going concern basis of preparation. Whilst the BODs has no reason tobelieve Carnival Corporation & plc will not be viable over a longer period, the period over which they consideredviability is a period of three years. The principal reasons why this period was selected are as follows:

i) Carnival Corporation & plc’s Strategic Plan that is presented to the BODs covers a three-year period;ii) Carnival Corporation & plc plans its guest sourcing and ship deployment strategies over a two to three

year horizon;iii) It takes approximately three years to build a new cruise ship, which is Carnival Corporation & plc’s

most significant capital investment andiv) The BODs considers that the three-year Strategic Plan provides a satisfactory basis to judge Carnival

Corporation & plc’s viability.

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The three-year Strategic Plan review also makes certain assumptions about ship additions, improvements anddisposals that are likely to occur during the Strategic Plan period, and considers the financings that will also berelated to these capital investments. In considering the likely effectiveness of such actions, the conclusions of theBODs regular monitoring and review of risk management and internal control systems, as described on pages 54to 66, is taken into account. The Carnival Corporation & plc three-year Strategic Plan considers key Non-GAAPmetrics as follows:

• Net revenue yields,• Net cruise costs per ALBD,• Operating income,• Operating income per ALBD,• Earnings per share,• Liquidity and• Return on invested capital.

Certain of these metrics are subject to sensitivity analysis, which involves changing a number of the mainassumptions underlying the BODs’ approved Strategic Plan both individually and in unison. Where appropriate,this analysis is carried out to evaluate the potential impact of Carnival Corporation & plc’s principal risksactually occurring.

Based on the results of these analyses, and the BODs’ risk appetite and how these risks are managed or mitigated,the BODs have a reasonable expectation that Carnival Corporation & plc will be able to continue in operationand meet its liabilities as they fall due over the three-year period of their assessment.

8. Repurchase Authorizations and Stock Swap Programs.

A. Repurchase Authorizations

Our BODs have authorized, subject to certain restrictions, the repurchase of up to an aggregate of $1.0 billion ofCarnival Corporation common stock and/or Carnival plc ordinary shares under the Repurchase Program. TheRepurchase Program does not have an expiration date and may be discontinued by our BODs at any time.

During the three months ended November 30, 2015, purchases of Carnival Corporation common stock pursuantto the Repurchase Program were as follows:

Period

Total Number ofShares ofCarnival

CorporationCommon StockPurchased (a)

Average PricePaid per Share

of CarnivalCorporation

Common Stock

Maximum DollarValue of Shares That

May Yet Be PurchasedUnder the Repurchase

Program (b)(in millions)

September 1, 2015 throughSeptember 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . 20,010 $49.31 $970

October 1, 2015 through October 31, 2015 . . . . 1,021,767 $52.16 $916November 1, 2015 through

November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . 4,199,045 $51.81 $699

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,240,822 $51.87

(a) No shares of Carnival Corporation common stock were purchased outside of publicly announced plans orprograms.

(b) During the three months ended November 30, 2015, there were no repurchases of Carnival plc ordinaryshares under the Repurchase Program.

During 2015, we repurchased 5.3 million shares of Carnival Corporation common stock for $276 million underthe Repurchase Program. In 2014, there were no repurchases of Carnival Corporation common stock under theRepurchase Program. In 2015 and 2014, there were no repurchases of Carnival plc ordinary shares under theRepurchase Program. From December 1, 2015 through January 27, 2016, we repurchased 9.6 million shares ofCarnival Corporation common stock for $486 million under the Repurchase Program. On January 28, 2016, the

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Boards of Directors approved a modification of the Repurchase Program authorization that increased theremaining $213 million of authorized repurchases by $1.0 billion. From January 28, 2016 through February 19,2016, we repurchased 8.3 million shares of Carnival Corporation common stock for $369 million under theRepurchase Program. Accordingly, at February 19, 2016 the remaining availability under the RepurchaseProgram was $843 million.

In addition to the Repurchase Program, the Boards of Directors authorized, in October 2008, the repurchase of upto 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares ofCarnival Corporation common stock under the Stock Swap programs described below. At February 19, 2016, theremaining availability under the Stock Swap programs was 18.1 million Carnival plc ordinary shares and 26.0million shares of Carnival Corporation common stock.

Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap programsrequire annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.5 millionordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annual general meeting orJuly 13, 2016. Depending on market conditions and other factors, we may repurchase shares of CarnivalCorporation common stock and/or Carnival plc ordinary shares under the Repurchase Program and the StockSwap programs concurrently.

B. Stock Swap Programs

We use the Stock Swap programs in situations where we can obtain an economic benefit because either CarnivalCorporation common stock or Carnival plc ordinary shares are trading at a price that is at a premium or discountto the price of Carnival plc ordinary shares or Carnival Corporation common stock, as the case may be. Anyrealized economic benefit under the Stock Swap programs is used for general corporate purposes, which couldinclude repurchasing additional stock under the Repurchase Program.

In the event Carnival Corporation common stock trades at a premium to Carnival plc ordinary shares, we mayelect to issue and sell shares of Carnival Corporation common stock through a sales agent, from time to time atprevailing market prices in ordinary brokers’ transactions, and use the sale proceeds to repurchase Carnival plcordinary shares in the UK market on at least an equivalent basis. Based on an authorization provided by theBoard of Directors in October 2008, Carnival Corporation was authorized to issue and sell up to 19.2 millionshares of its common stock in the U.S. market and had 18.1 million shares remaining at February 19, 2016. Anysales of Carnival Corporation shares have been or will be registered under the Securities Act.

In the event Carnival Corporation common stock trades at a discount to Carnival plc ordinary shares, we mayelect to sell existing ordinary shares of Carnival plc, with such sales made by Carnival Corporation or CarnivalInvestments Limited through its sales agent from time to time at prevailing market prices in ordinary brokers’transactions, and use the sale proceeds to repurchase shares of Carnival Corporation common stock in the U.S.market on at least an equivalent basis. Based on an authorization provided by the Board of Directors in January2013, Carnival Corporation or CIL was authorized to sell up to 32.8 million Carnival plc ordinary shares in theUK market and had 26.0 million shares remaining at February 19, 2016. Any sales of Carnival plc ordinaryshares have been or will be registered under the Securities Act.

During 2014, no Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchasedunder the “Stock Swap” programs. During 2015, under the Stock Swap programs, CIL sold 5.1 million Carnivalplc ordinary shares through its sales agent, Goldman Sachs International (“Goldman”), for total gross proceeds of$266 million and paid commission fees to Goldman of $1.9 million and $0.4 million in other governmental andregulatory transaction fees resulting into total net proceeds of $264 million. During the three months endedNovember 30, 2015, we paid $0.7 million in commission fees to Goldman and $0.1 million in othergovernmental and regulatory transaction fees. Substantially all of the net proceeds from these sales were used topurchase 5.1 million shares of Carnival Corporation common stock. During 2015, no Carnival Corporationcommon stock was sold or Carnival plc ordinary shares were repurchased under the “Stock Swap” program.

From December 1, 2015 through February 19, 2016, CIL sold 0.9 million ordinary shares of Carnival plc throughits sales agent for net proceeds of $40 million. Substantially all of the net proceeds of these sales were used topurchase 0.9 million shares of Carnival Corporation common stock. See Note 17 – “Reserves and Other EquityActivity” of the Carnival plc financial statements.

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During the three months ended November 30, 2015, purchases of Carnival Corporation common stock pursuantto the Stock Swap program were as follows:

Period

Total Number ofShares ofCarnival

CorporationCommon StockPurchased (a)

AveragePrice Paid

per Share ofCarnival

CorporationCommon

Stock

Maximum Numberof CarnivalCorporation

Common Stock ThatMay Yet Be

Purchased Underthe Carnival

Corporation StockSwap Program (b)

(in millions)September 1, 2015 through September 30, 2015 . . . . . 140,000 $49.28 28.6October 1, 2015 through October 31, 2015 . . . . . . . . . . 1,183,000 $50.24 27.5November 1, 2015 through November 30, 2015 . . . . . 550,000 $51.61 26.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,873,000 $50.70

(a) No shares of Carnival Corporation common stock were purchased outside of publicly announced plans orprograms.

This Strategic Report, as set out on pages 1 to 69, has been approved by the Board.

By order of the Board

Micky ArisonChairman of the Board of DirectorsFebruary 19, 2016

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INTRODUCTORY NOTE TO THE CARNIVAL PLC IFRS FINANCIAL STATEMENTSFOR THE YEAR ENDED NOVEMBER 30, 2015

The Carnival plc consolidated IFRS Financial Statements on pages 71 to 116, which are required to satisfyreporting requirements of the Companies Act 2006, incorporate the results of Carnival plc and its subsidiariesand, accordingly, do not include the IFRS consolidated results and financial position of Carnival Corporationand its subsidiaries.

However, the Directors consider that, within the Carnival Corporation and Carnival plc dual listed companyarrangement, the most appropriate presentation of Carnival plc’s results and financial position is by referenceto the Carnival Corporation & plc U.S. GAAP consolidated financial statements (“DLC FinancialStatements”), which are included in Annex 1, but do not form part of these Carnival plc financial statements.

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CARNIVAL PLCGROUP STATEMENTS OF INCOME

(in millions, except per share data)

Years Ended November 30,2015 2014

RevenuesCruise

Passenger tickets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,300 $ 5,664Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,262 1,329

Tour and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 215

6,788 7,208Operating Costs and Expenses

CruiseCommissions, transportation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,075 1,187Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 201Payroll and related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 716Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 836Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 391Other ship operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,493 1,389

Tour and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 160

4,524 4,880Selling and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 813Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640 665Impairment (reversals) losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) 16

5,924 6,374Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 864 834

Nonoperating (Expense) IncomeInterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2Interest expense, net of capitalised interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57) (70)Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (3)

(63) (71)

Income Before Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 763

Income Tax Expense, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (20)

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 771 $ 743

Earnings Per ShareBasic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.57 $ 3.45

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.56 $ 3.44

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation. In accordance with Section 408 of the Companies Act2006, the Company has not presented its own Statements of Income or Statements of Comprehensive Income.

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1). For information, set out below isthe U.S. GAAP and adjusted consolidated earnings per share included within the DLC Financial Statements ofthe DLC Annual Report and the Business Review section of the Strategic Report, respectively, for the yearsended November 30:

2015 2014 (a)

DLC U.S. GAAP basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.57

DLC U.S. GAAP diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56

DLC adjusted diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.70 $ 1.93

(a) The 2014 earnings per share amounts have been revised for the accounting for one of Carnival Corporationbrands’ marine and technical spare parts in order to consistently expense and classify them fleetwide (seeNote 1 of the DLC Financial Statements provided to shareholders as other information, which are includedin Annex 1, but do not form part of these Carnival plc financial statements).

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CARNIVAL PLCGROUP STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions)

Years Ended November 30,2015 2014

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 771 $ 743

Other Comprehensive (Loss) IncomeItems that will not be reclassified through the Statements of Income

Actuarial (losses) gains on post-employment benefit obligations . . . . . . . . . . . . . (15) 6

Items that may be reclassified through the Statements of IncomeChanges in foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . (1,054) (712)Net gains on hedges of net investments in foreign operations . . . . . . . . . . . . . . . . 43 25Net losses on cash flow derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32) (37)

(1,043) (724)

Other Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,058) (718)

Total Comprehensive (Loss) Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (287) $ 25

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation.

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1).

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CARNIVAL PLCBALANCE SHEETS

(in millions)

Group CompanyNovember 30,

2015 2014 2015 2014

ASSETSCurrent Assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 821 $ 217 $ 731 $ 107Trade and other receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 145 72 72Insurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 166 - -Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 127 45 38Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 129 49 50

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,313 784 897 267

Property and Equipment, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,745 13,659 4,610 4,064

Amount Owed from Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 220 77

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588 669 165 172

Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 - - -

Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 216 36 31

Investments in Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 5,717 6,129

$14,840 $15,328 $11,645 $10,740

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent Liabilities

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30 $ 14 $ - $ -Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 518 313 470Amount owed to the Carnival Corporation group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,039 1,513 2,057 1,328Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 328 92 100Claims reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 178 34 9Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 402 183 182Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,217 1,208 820 745

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,448 4,161 3,499 2,834

Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,936 2,130 1,598 1,687

Other Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 283 61 78

Shareholders’ EquityShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 358 358 358Share premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 137 143 137Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,362 7,835 6,275 5,734Other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (619) 424 (289) (88)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,244 8,754 6,487 6,141

$14,840 $15,328 $11,645 $10,740

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation.

The Carnival plc Group financial statements contained on pages 71 to 116 were approved by the Board ofDirectors on February 19, 2016 and signed on their behalf by

Micky Arison Arnold W. DonaldChairman of the Board of Directors President and Chief Executive Officer and Director

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1).

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CARNIVAL PLCSTATEMENTS OF CASH FLOWS

(in millions)

Group CompanyYears Ended November 30,

2015 2014 2015 2014

OPERATING ACTIVITIESIncome before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 801 $ 763 $ 788 $ 153Adjustments to reconcile income before income taxes to net cash provided by

operating activitiesDepreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640 665 246 220Ship impairment (reversals) losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) 53 - -Gain on ship sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (37) - -Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10 4 5Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 68 37 32Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 12 15 15

1,504 1,534 1,090 425Changes in operating assets and liabilities

Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) 15 (4) (8)Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14) 6 (10) 3Insurance recoverables, prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . 127 413 (2) (21)Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (3) (5) 16Claims reserve and accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84) (359) (10) 42Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 41 106 63

Cash provided by operations before interest and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 1,596 1,647 1,165 520Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 10 20Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62) (77) (47) (56)Income taxes paid, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (9) (1) (1)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,504 1,563 1,127 483

INVESTING ACTIVITIESAdditions to property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,326) (1,075) (1,001) (780)Proceeds from sale of ship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 - 647Capital contribution to a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - (1,243)

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 21 7 11

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,318) (1,012) (994) (1,365)

FINANCING ACTIVITIESChanges in loans with the Carnival Corporation group and Group companies . . . 707 (728) 768 645Proceeds from (repayments of) short-term borrowings, net . . . . . . . . . . . . . . . . . . . . . 20 (35) - 10Principal repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (484) (357) (443) (308)Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 773 456 773Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (227) (216) (227) (216)Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (4) (1) (3)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . 470 (567) 553 901Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . (52) (30) (62) (56)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 604 (46) 624 (37)Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 263 107 144

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 821 $ 217 $ 731 $ 107

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation.

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1).

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CARNIVAL PLCGROUP STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in millions)

Other reserves

Sharecapital

Sharepremium

Retainedearnings

Translationreserve

Cash flowhedges

Mergerreserve Total

Totalshareholders’

equity

Balances at November 30, 2013 . . $358 $136 $7,291 $ (359) $ 4 $1,503 $ 1,148 $ 8,933Comprehensive income

Net income . . . . . . . . . . . . . . . . . . . . . - - 743 - - - - 743Changes in foreign currency

translation adjustment . . . . . . . . - - - (712) - - (712) (712)Net gains on hedges of net

investments in foreignoperations . . . . . . . . . . . . . . . . . . . . - - - 25 - - 25 25

Net losses on cash flowderivative hedges . . . . . . . . . . . . . - - - - (37) - (37) (37)

Actuarial gains on post-employment benefitobligations . . . . . . . . . . . . . . . . . . . - - 6 - - - - 6

Total comprehensive income(loss) . . . . . . . . . . . . . . . . . . . . . . . . . - - 749 (687) (37) - (724) 25

Cash dividends declared . . . . . . . . . - - (216) - - - - (216)Other, net . . . . . . . . . . . . . . . . . . . . . . . - 1 11 - - - - 12

Balances at November 30, 2014 358 137 7,835 (1,046) (33) 1,503 424 8,754Comprehensive income

Net income . . . . . . . . . . . . . . . . . . . . . - - 771 - - - - 771Changes in foreign currency

translation adjustment . . . . . . . . - - - (1,054) - - (1,054) (1,054)Net gains on hedges of net

investments in foreignoperations . . . . . . . . . . . . . . . . . . . . - - - 43 - - 43 43

Net losses on cash flowderivative hedges . . . . . . . . . . . . . - - - - (32) - (32) (32)

Actuarial losses on post-employment benefitobligations . . . . . . . . . . . . . . . . . . . - - (15) - - - - (15)

Total comprehensive income(loss) . . . . . . . . . . . . . . . . . . . . . . . . . - - 756 (1,011) (32) - (1,043) (287)

Cash dividends declared . . . . . . . . . - - (239) - - - - (239)Other, net . . . . . . . . . . . . . . . . . . . . . . . - 6 10 - - - - 16

Balances at November 30, 2015 $358 $143 $8,362 $(2,057) $(65) $1,503 $ (619) $ 8,244

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation.

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1).

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CARNIVAL PLCCOMPANY STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in millions)

Other reserves

ShareCapital

Sharepremium

RetainedEarnings

Translationreserve

Cash flowhedges

Mergerreserve Total

Totalshareholders’

equity

Balances at November 30, 2013 . . . . . . . . . . $358 $128 $5,779 $ 75 $ 4 $36 $ 115 $6,380Comprehensive income

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 155 - - - - 155Changes in foreign currency translation

adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - (191) - - (191) (191)Net gains on hedges of net investments

in foreign operations . . . . . . . . . . . . . . . . . - - - 25 - - 25 25Net losses on cash flow derivative

hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - (37) - (37) (37)Actuarial gains on post-employment

benefit obligations . . . . . . . . . . . . . . . . . . . - - 6 - - - - 6

Total comprehensive income (loss) . . . . . - - 161 (166) (37) - (203) (42)Cash dividends declared . . . . . . . . . . . . . . . . - - (216) - - - - (216)Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 9 10 - - - - 19

Balances at November 30, 2014 . . . . . . . . . . 358 137 5,734 (91) (33) 36 (88) 6,141Comprehensive income

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 786 - - - - 786Changes in foreign currency translation

adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - (212) - - (212) (212)Net gains on hedges of net investments

in foreign operations . . . . . . . . . . . . . . . . . - - - 43 - - 43 43Net losses on cash flow derivative

hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - (32) - (32) (32)Actuarial losses on post-employment

benefit obligations . . . . . . . . . . . . . . . . . . . - - (15) - - - - (15)

Total comprehensive income (loss) . . . . . - - 771 (169) (32) - (201) 570Cash dividends declared . . . . . . . . . . . . . . . . - - (239) - - - - (239)Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 6 9 - - - - 15

Balances at November 30, 2015 . . . . . . . . . . $358 $143 $6,275 $(260) $(65) $36 $(289) $6,487

The accompanying notes on pages 77 to 116 are an integral part of these financial statements. These financialstatements only present the Carnival plc consolidated IFRS Financial Statements and, accordingly, do not includethe consolidated IFRS results of Carnival Corporation.

Within the DLC arrangement the most appropriate presentation of Carnival plc’s results and financial positionis considered to be by reference to the DLC Financial Statements (see Note 1).

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CARNIVAL PLCNOTES TO GROUP AND COMPANY IFRS FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies

Carnival plc was incorporated in England and Wales in 2000 and its headquarters is located at Carnival House,100 Harbour Parade, Southampton, SO15 1ST, UK (registration number 4039524). The following accountingpolicies have been applied consistently in dealing with items which are considered material in relation toCarnival plc (the “Company”), its subsidiaries and associates (referred to collectively in these IFRS financialstatements as the “Group,” “our,” “us,” and “we”).

As of February 19, 2016, our cruise brands’ summary information is as follows:

Cruise BrandsPassengerCapacity (a)

Percentage ofTotal Capacity

Number ofCruise Ships

Costa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,924 34% 15AIDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,656 18 10P&O Cruises (UK) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,383 18 8Princess (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,056 13 6P&O Cruises (Australia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,324 7 5Cunard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,694 6 3Carnival Cruise Line (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,248 4 2

105,285 100% 49

(a) In accordance with cruise industry practice, passenger capacity is calculated based on the assumption of twopassengers per cabin even though some cabins can accommodate three or more passengers.

(b) Princess and Carnival Cruise Line, two of Carnival Corporation’s North America cruise brands, time charterfour and one of their ships, respectively, to us to operate year-round in Australia and/or Asia. In addition,Princess time-charters two and Carnival Cruise Line time-charters one ship to us to operate seasonally fromAustralia and/or Asia.

Basis of Preparation

The Carnival plc Group and Company financial statements are presented in U.S. dollars unless otherwise noted,as this is the Group’s and Company’s presentation currency. They are prepared on the historical cost basis,except for certain financial assets and liabilities (including derivative instruments) that are stated at fair value.

The financial statements have been prepared in accordance with International Financial Reporting Standards asadopted by the European Union (“IFRS”) and with those parts of the Companies Act 2006 applicable tocompanies reporting under IFRS and International Financial Reporting Interpretations Committee interpretations.The financial statements have been prepared on a going concern basis. The Directors of the Group have areasonable expectation that, on the basis of current financial projections and available borrowing facilities andbased on reassessments of principle risks, we are well-positioned to meet our commitments and obligations forthe next 12 months from the date of this report and will remain in operational existence.

The preparation of Group and Company financial statements in conformity with IFRS requires management tomake estimates and assumptions that affect the application of policies and reported and disclosed amounts in thefinancial statements. The estimates and underlying assumptions are based on historical experience and variousother factors that we believe to be reasonable under the circumstances, and form the basis of making judgmentsabout carrying values of assets and liabilities that are not readily apparent from other sources. Actual results maydiffer from these estimates used in preparing the financial statements.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesare recognised in the period in which the estimate is revised if the revision affects only that period or in theperiod of the revision and future periods if the revision affects both current and future periods.

A review of the critical accounting estimates made by management is included within the Business Reviewsection of the Strategic Report on pages 37 to 39.

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Basis of Consolidation

The Carnival plc Group IFRS Financial Statements include the results of the Company and all its controlledsubsidiaries, which subsidiaries are all entities (including structured entities) over which the Group has control.The Group controls an entity when the Group is exposed to, or has rights to, variable returns from itsinvolvement with the entity and has the ability to affect those returns through its power to direct the activities ofthe entity. All significant intra-Group balances and transactions are eliminated in consolidation.

Carnival Corporation and Carnival plc operate a dual listed company (“DLC”), known as Carnival Corporation &plc, whereby the businesses of Carnival Corporation and Carnival plc are combined through a number ofcontracts and through provisions in Carnival Corporation’s Articles of Incorporation and By-Laws and Carnivalplc’s Articles of Association. The two companies operate as if they are a single economic enterprise, but each hasretained its separate legal identity. Each company’s shares are publicly traded; on the New York Stock Exchange(“NYSE”) for Carnival Corporation and the London Stock Exchange for Carnival plc. In addition, Carnival plcAmerican Depository Shares are traded on the NYSE. The contracts governing the DLC arrangement providethat Carnival Corporation and Carnival plc each continue to have separate Boards of Directors, but the Boards ofDirectors and senior executive management of both companies are identical. Further details relating to the DLCarrangement are included in Note 3 of the DLC Financial Statements, which are included in Annex 1, but do notform part of these Carnival plc financial statements.

In order to provide the Carnival Corporation and Carnival plc shareholders with the most meaningful descriptionof their economic interest in the DLC arrangement, consolidated financial statements of Carnival Corporation &plc are included in the DLC Annual Report. The DLC Financial Statements have been prepared under purchaseaccounting principles whereby the DLC transaction was accounted for as an acquisition of Carnival plc byCarnival Corporation.

The Group and Company IFRS Financial Statements are required to satisfy reporting requirements of theCompanies Act 2006 and do not include the IFRS consolidated results and financial position of CarnivalCorporation and its subsidiaries. Accordingly, the Directors consider that, within the DLC arrangement, the mostappropriate presentation of Carnival plc’s results and financial position is by reference to the U.S. generallyaccepted accounting principles (“U.S. GAAP”) DLC Financial Statements, on the basis that all significantfinancial and operating decisions affecting the DLC companies are made on the basis of U.S. GAAP informationand consequences. Accordingly, the DLC Financial Statements are provided to shareholders as other information,which are included in Annex 1, but do not form part of these Carnival plc financial statements. Finally, theCarnival plc Directors’ Report, Part II of the Carnival plc Directors’ Remuneration Report and the Carnival plcCorporate Governance Report, included as Annexes A, B and C, respectively, to the Notice of Annual Meetingsand Proxy Statement, dated February 19, 2016 (“Proxy Statement”), Part I of the Carnival plc Directors’Remuneration Report, contained within the Proxy Statement and the Strategic Report are all included as part ofthe 2015 Carnival plc Annual Report. Additional information related to environmental, social and governanceissues can be found in our Strategic Report, Carnival plc Directors’ Report and Carnival plc CorporateGovernance Report.

The above mentioned Proxy Statement information can be found at the Carnival Corporation & plc website atwww.carnivalcorp.com or www.carnivalplc.com.

Cash and Cash Equivalents

Cash and cash equivalents include investments with maturities of three months or less at acquisition, which arestated at cost.

Inventories

Inventories consist substantially of food and beverages, hotel and restaurant products and supplies, fuel and giftshop merchandise held for resale, which are all carried at the lower of cost or net realisable value. Cost isdetermined using the weighted-average or first-in, first-out methods.

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Property and Equipment

Property and equipment, including ships, are stated at cost less accumulated depreciation. Depreciation andamortisation were computed using the straight-line method over our estimates of useful lives and residual values,as a percentage of original cost, as follows:

Years Residual Values

Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 15%Ship improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of remaining ship life or

useful life (3-28) 0%Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . 10-35 0% or 10%Computer hardware and software . . . . . . . . . . . . . . . . . . . . 3-10 0% or 10%Transportation equipment and other . . . . . . . . . . . . . . . . . . 3-20 0% or 10%Leasehold improvements, including port facilities . . . . Shorter of lease term or

related asset life (3-30) -

The cruise industry is very capital intensive, and during 2016, we will operate 49 cruise ships. Therefore, wehave a capital program that we develop for the improvement of our ships and for asset replacements in order toenhance the effectiveness and efficiency of our operations; comply with, or exceed all relevant legal andstatutory requirements related to health, environment, safety, security and sustainability; and gain strategicbenefits or provide newer improved product innovations to our guests.

Ship improvement costs that we believe add value to our ships, such as those discussed above, are capitalised tothe ships and depreciated over the shorter of their or the ships’ estimated remaining useful life, while costs ofrepairs and maintenance, including minor improvement costs and dry-dock expenses, are charged to expense asincurred and included in other ship operating expenses. Dry-dock costs primarily represent planned majormaintenance activities that are incurred when a ship is taken out-of-service for scheduled maintenance. Wecapitalise interest as part of the cost of acquiring ships and other capital projects during their construction period.The specifically identified or estimated cost and accumulated depreciation of previously capitalised shipcomponents are written-off upon retirement, which may result in a loss on disposal that is also included in othership operating expenses. Liquidated damages received from shipyards as a result of their late ship delivery arerecorded as reductions to the cost basis of the ship.

We review our long-lived assets, principally our ships, for impairment whenever events or changes incircumstances indicate that the carrying amounts of these assets may not be fully recoverable. Upon theoccurrence of a triggering event, the assessment of possible impairment is based on our ability to recover thecarrying value of our asset based on our estimate of its recoverable amount, which is the higher of the fair valueless cost to sell and its value in use. This is determined by using the asset’s estimated discounted future cashflows. If these estimated discounted future cash flows are less than the carrying value of the asset, an impairmentcharge is recognised for the excess. As it relates to our ships, the lowest level for which we maintain identifiablecash flows that are independent of the cash flows of other assets and liabilities is at the individual ship level. Ifsubsequent to the impairment there has been a change in the estimates used to determine our ships recoverableamount, then the carrying amount of the ship may be increased by the reversal of the impairment. The reversal islimited to the carrying amount that would have been determined had no impairment loss been recognised for theship in prior years. A significant amount of judgment is required in estimating the future cash flows and fairvalues of our cruise ships.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in abusiness acquisition. We review our goodwill for impairment at least annually and, when events or circumstancesdictate, more frequently. All of our goodwill has been allocated to our business units, also referred to as “cruisebrands”, on the basis of expected benefit resulting from the acquisition and is stated at cost less accumulatedgoodwill impairment charges. The recoverability of goodwill is determined by comparing the carrying amount ofthe net assets allocated to each cash-generating unit (“CGU”) with its recoverable amount. The estimatedrecoverable amount is the higher of the cruise brand fair value less cost to sell and its value in use, and if therecoverable amount is greater than the cruise brand net asset carrying value, then the goodwill amount is deemedrecoverable. A significant amount of judgment is required in estimating the recoverable amounts of our cruisebrands’ goodwill.

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Revenue and Expense Recognition

Revenue comprises sales to third-parties and excludes VAT and other similar sales taxes. Guest cruise depositsrepresent unearned revenues and are initially included in customer deposit liabilities when received (see BusinessReview section on page 49 within the Strategic Report for additional discussion of customer deposits). Customerdeposits are subsequently recognised as cruise revenues, together with revenues from onboard and otheractivities, and all associated direct costs and expenses of a voyage are recognised as cruise costs and expenses,upon completion of voyages with durations of ten nights or less and on a pro rata basis for voyages in excess often nights. The impact of recognising these shorter duration cruise revenues and costs and expenses on acompleted voyage basis versus on a pro rata basis is not significant. Future travel discount vouchers issued toguests and ship charterers are included as a reduction of cruise passenger ticket revenues when such vouchers areutilised or upon issuance to certain ship charterers. Guest cancellation fees are recognised in cruise passengerticket revenues at the time of the cancellation.

Our sale to guests of air and other transportation to and from airports near the home ports of our ships areincluded in cruise passenger ticket revenues and the related cost of purchasing these services are included incruise transportation costs. The proceeds that we collect from the sales of third-party shore excursions and onbehalf of our onboard concessionaires, net of the amounts remitted to them, are included in onboard and othercruise revenues as concession revenues. All of these amounts are recognised on a completed voyage or pro ratabasis as discussed above.

Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. A portion ofthese fees, taxes and charges vary with guest head counts and are directly imposed on a revenue-producingarrangement. This portion of the fees, taxes and charges is expensed in commissions, transportation and othercosts when the corresponding revenues are recognised. The remaining portion of fees, taxes and charges are alsoincluded in cruise passenger ticket revenues but are expensed in other ship operating expenses when thecorresponding revenues are recognised.

Revenues and expenses from our hotel and transportation operations, which are included in our Tour and Othersegment, are recognised at the time the services are performed or expenses are incurred. Revenues from the long-term leasing of ships, which are also included in our Tour and Other segment, are recognised ratably over theterm of the charter agreement using the straight-line method (see Note 2).

Insurance

We maintain insurance, including under Carnival Corporation & plc’s group risk sharing programs, to cover anumber of risks including illness and injury to crew, guest injuries, pollution, other third-party claims inconnection with our cruise activities, damages to hull and machinery for each of our ships, war risks, workerscompensation, employee health, directors’ and officers’ liability, property damages and general liabilities forthird-party claims. We recognise insurance recoverables from third-party insurers for incurred expenses at thetime the recovery is virtually certain and upon realisation for amounts in excess of incurred expenses. All of ourinsurance policies are subject to coverage limits, exclusions and deductible levels. The liabilities associated withcrew illnesses and crew and guest injury claims, including all legal costs, are estimated based on the specificmerits of the individual claims or actuarially estimated based on historical claims experience, loss developmentfactors and other assumptions.

Selling and Administrative Expenses

Selling expenses include a broad range of advertising, such as marketing and promotional expenses. Advertisingis charged to expense as incurred. Administrative expenses represent the costs of our shoreside ship support,reservations and other administrative functions, and includes salaries and related benefits, professional fees andbuilding occupancy costs, which are typically expensed as incurred.

Foreign Currency Translations and Transactions

Each business determines its functional currency by reference to its primary economic environment. We translatethe assets and liabilities of our foreign operations that have functional currencies other than the U.S. dollar atexchange rates in effect at the balance sheet date. Revenues and expenses of these foreign operations aretranslated at weighted-average exchange rates for the period. Their equity is translated at historical rates and theresulting foreign currency translation adjustments are included in the translation reserve, which is a separate

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component of other reserves within shareholders’ equity. Therefore, the U.S. dollar value of these non-equitytranslated items in our Group and Company financial statements will fluctuate from period to period, dependingon the changing value of the U.S. dollar versus these currencies.

We execute transactions in a number of different currencies, principally the euro, sterling and Australian,Canadian and U.S. dollars. Exchange rate gains and losses arising from changes in foreign currency exchangerates between the time an expense is recorded and when it is settled as well as the remeasurement of monetaryassets and liabilities, all denominated in a currency other than the functional currency of the entity involved, arerecognised currently in nonoperating earnings, unless such monetary liabilities have been designated to act ashedges of net investments in our foreign operations. These net gains or losses resulting from these “nonoperatingforeign currency transactions” were insignificant in 2015 and 2014. In addition, the unrealised gains or losses onour long-term intercompany receivables and payables denominated in a non-functional currency, which are notexpected to be repaid in the foreseeable future and are therefore considered to form part of our net investments,are recorded as foreign currency translation adjustments, which are included in the translation reserve.

Share-Based Compensation

We recognise compensation expense for all share-based compensation awards using the fair value method. Fortime-based share awards, we recognise compensation cost ratably using the straight-line attribution method overthe expected vesting period or to the retirement eligibility date, if less than the vesting period, when vesting is notcontingent upon any future performance. For performance-based share awards, we generally recognisecompensation cost ratably using the straight-line attribution method over the expected vesting period based onthe probability of the performance condition being achieved. If all or a portion of the performance condition isnot expected to be met, the appropriate amount of previously recognised compensation expense will be reversedand future compensation expense will be adjusted accordingly. For market-based share awards, we recognisecompensation cost ratably using the straight-line attribution method over the expected vesting period. If the targetmarket conditions are not expected to be met, compensation expense will still be recognised. In addition, weestimate the amount of expected forfeitures based on historical forfeiture experience when calculatingcompensation cost. We revise our forfeiture estimates if the actual forfeitures that occur are significantlydifferent from the estimate.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of ordinary sharesoutstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of ordinary shares and common stock equivalents outstanding during each period.

Pensions

The Group operates both defined benefit and defined contribution plans. The net deficit or surplus for eachdefined benefit pension plan is calculated in accordance with IAS 19(R), based on the present value of thedefined benefit obligation at the balance sheet date less the fair value of the plan assets. The calculation isperformed by a qualified actuary using the projected unit credit method. The discount rate is the yield at thebalance sheet date on AA credit rated bonds or local equivalents that have maturity dates approximating theterms of the pension plans’ obligations.

Actuarial gains and losses that arise in calculating the defined benefit pension plans’ obligations are recognisedin the period in which they arise directly in the Group and Company’s comprehensive income.

The operating and financing costs of defined benefit pension plans are recognised in the Group and Company’sincome; current service costs are spread systematically over the expected average remaining service lives ofemployees and financing costs are recognised in the periods within which they arise. To the extent that thebenefits vest immediately, the expense is recognised immediately in the Group and Company’s income.

Defined contribution plan expenses are recognised in the period to which they relate. We contribute to theseplans based on employee contributions, salary levels and length of service.

Derivatives and Other Financial Instruments

We utilise derivative and nonderivative financial instruments, such as foreign currency forwards, options andswaps, foreign currency debt obligations and foreign currency cash balances, to manage our exposure to

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fluctuations in certain foreign currency exchange rates, and interest rate swaps to manage our interest rateexposure in order to achieve a desired proportion of fixed and floating rate debt. Our policy is not to use anyfinancial instruments for trading or other speculative purposes.

All derivatives are recorded at fair value. The changes in fair value are recognised currently in earnings if thederivatives do not qualify as effective hedges. Subject to specific criteria, derivatives, financial assets andfinancial liabilities may be designated as forming hedge relationships, as a result of which changes in their fairvalue are offset in the Group and Company’s income or recognised directly in the Group and Company’scomprehensive income, depending on the nature of the hedge relationship. Hedging derivatives fall into threeclassifications: fair value hedges, cash flow hedges and hedges of a net investment. Changes in the fair value offair value hedge derivatives are offset against the changes in the fair value of the underlying hedged items in theGroup and Company’s income. The effective portion of the changes in fair value of cash flow hedge derivativesare recognised in the Group and Company’s comprehensive income until the underlying hedged item isrecognised in earnings or the forecasted transaction is no longer probable. Changes in the fair value of hedges ofa net investment are recognised in the Group and Company’s comprehensive income to offset a portion of thechange in the translated value of the net investment being hedged. In the event that a previously hedgedinvestment is sold or liquidated, the accumulated amount previously recognised from hedging is required to beremoved from the hedging reserve within shareholders’ equity and reflected in net income. We formallydocument hedging relationships for all derivative and nonderivative hedges and the underlying hedged items, aswell as our risk management objectives and strategies for undertaking the hedge transactions.

We classify the fair values of all derivative contracts as either current or long-term, depending on whether thematurity date of the derivative contract is within or beyond one year from the balance sheet date. The cash flowsfrom derivatives treated as hedges are classified in the Statements of Cash Flows in the same category as the itembeing hedged.

Interest-bearing debt and bank overdrafts are recorded at their initial fair value, which normally reflects theproceeds received by us, net of debt issuance costs, and subsequently stated at amortised cost, including accruedinterest. Any difference between the proceeds after debt issuance costs and the premium and redemption valuesare amortised to interest expense over the term of the debt, typically on a straight-line basis which approximatesthe effective interest method.

Income Taxes

Deferred income taxes are provided using the balance sheet liability method. Deferred income tax assets arerecognised to the extent that it is probable that future taxable income will be available against which thetemporary differences can be utilised. Deferred income taxes are measured at the average tax rates that areexpected to apply in the periods in which the timing differences are expected to reverse based on tax rates andlaws that have been enacted or substantially enacted by the balance sheet date. Current income taxes are the taxespayable on the taxable income for the year, applying current rates and any adjustments in respect of previousyears.

Dividends

Dividend distributions are recognised in the period in which the dividends are declared, since under the DLCarrangement the declaration of a dividend by the Boards of Directors of Carnival Corporation and Carnival plcestablishes a liability for Carnival plc.

Changes in Accounting Policy and Disclosures

During 2015, we adopted the amendments to IFRS 10, 11 and 12 that did not have a material effect on us.

New and Amended Standards That Will Be Adopted By Us In The Future

• IFRS 8, “Operating Segments” amendment effective for accounting periods beginning on or afterFebruary 1, 2015;

• IFRS 15, “Revenue from contracts with customers” effective for accounting periods beginning onor before January 1, 2018 and

• IFRS 16, “Leases” effective for annual periods beginning on or after January 1, 2019.

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Management is still in the process of determining if these standards will have a material impact on us.

NOTE 2 - Segment Information

IFRS 8 “Operating Segments” requires that an entity’s operating segments are reported on the same basis as theinternally reported information that is provided to the chief operating decision maker (“CODM”), who for us isthe President and Chief Executive Officer of Carnival Corporation and Carnival plc.

As previously discussed, within the DLC arrangement the most appropriate presentation of Carnival plc’s resultsand financial position is by reference to the DLC Financial Statements, which are included in Annex 1, but do notform part of these Carnival plc financial statements. Accordingly, decisions to allocate resources and assessperformance for Carnival plc are made by the CODM upon review of the U.S. GAAP segment results across allof Carnival Corporation & plc’s cruise brands and other segments. Carnival Corporation & plc has threereportable cruise segments that are comprised of its (1) North America cruise brands, (2) Europe, Australia &Asia (“EAA”) cruise brands and (3) Cruise Support. In addition, Carnival Corporation & plc has a Tour andOther segment.

The Carnival Corporation & plc North America cruise segment includes Carnival Cruise Line, Holland AmericaLine, Princess and Seabourn. The Carnival Corporation & plc EAA cruise segment includes AIDA, Costa,Cunard, P&O Cruises (Australia), P&O Cruises (UK) and prior to November 2014, Ibero . These individualcruise brand operating segments have been aggregated into two reportable segments based on the similarity oftheir economic and other characteristics, including types of customers, regulatory environment, maintenancerequirements, supporting systems and processes and products and services they provide. The CarnivalCorporation & plc Cruise Support segment represents certain of its port and related facilities and other servicesthat are provided for the benefit of its cruise brands and Fathom’s pre-launch selling, general and administrativeexpenses.

The Carnival Corporation & plc Tour and Other segment represents the hotel and transportation operations ofHolland America Princess Alaska Tours. In 2014, the Tour and Other segment also included one ship that itchartered to an unaffiliated entity. In November 2014, we entered into a bareboat charter/sale agreement underwhich Grand Holiday was chartered to an unrelated entity in January 2015 through March 2025. Additionally, inDecember 2014, we entered into a bareboat charter/sale agreement under which Costa Celebration was charteredto an unrelated entity in December 2014 through August 2021. Under these agreements, ownership of GrandHoliday and Costa Celebration will be transferred to the buyer at the end of their lease term. Neither of thesetransactions met the criteria to qualify as a finance-type lease and, accordingly, they are being accounted for asoperating leases whereby we recognise charter revenue over the term of the agreements.

Subsequent to entering into these agreements, Carnival Corporation & plc’s Tour and Other segment includesthese three ships. The significant accounting policies of these segments are the same as those described in Note 2of the DLC Financial Statements, which are included in Annex 1, but do not form part of these Carnival plcfinancial statements.

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Selected information for the Carnival Corporation & plc segments and the reconciliation to the correspondingCarnival plc amounts as of and for the years ended November 30 was as follows (in millions):

RevenuesOperatingexpenses

Selling andadministrative

Depreciationand

amortisation

Operatingincome(loss)

Capitalexpenditures

Totalassets

2015North America Cruise

Brands (a) . . . . . . . . . . . . $ 9,866 $ 5,925 $ 1,140 $ 994 $ 1,807 $ 854 $ 22,420EAA Cruise Brands (b) . . 5,636 3,442 695 561 938 1,265 14,076Cruise Support . . . . . . . . . . 119 58 223 27 (189) 162 2,248Tour and Other (a) . . . . . . . 226 155 9 44 18 13 493(d)Intersegment

elimination (a) . . . . . . . . (133) (133) - - - - -

Carnival Corporation &plc – U.S. GAAP . . . . . 15,714 9,447 2,067 1,626 2,574 2,294 39,237

Carnival Corporation,U.S. GAAP vs. IFRSdifferences andeliminations (e) . . . . . . . (8,926) (4,923) (1,285) (986) (1,710)(c) (968) (24,397)

Carnival plc – IFRS . . . . . $ 6,788 $ 4,524 $ 782 $ 640 $ 864 $ 1,326 $ 14,840

2014North America Cruise . . .Brands (a) (f) . . . . . . . . . . . . $ 9,559 $ 6,436 $ 1,121 $ 961 $ 1,041 $ 1,315 $ 22,681EAA Cruise Brands (b) . . 6,148 3,914 725 616 893 (g) 1,054 15,228Cruise Support . . . . . . . . . . 90 39 200 25 (174) 156 1,023Tour and Other (a) . . . . . . . 215 160 8 35 12 58 516(d)Intersegment

elimination (a) . . . . . . . . (128) (128) - - - - -

Carnival Corporation &plc – U.S. GAAP . . . . . 15,884 10,421 2,054 1,637 1,772 2,583 39,448

Carnival Corporation,U.S. GAAP vs. IFRSdifferences andeliminations (e) . . . . . . . (8,676) (5,541) (1,241) (972) (938) (1,508) (24,120)

Carnival plc – IFRS . . . . . $ 7,208 $ 4,880 $ 813 $ 665 $ 834 $ 1,075 $ 15,328

(a) A portion of the North America cruise brands’ segment revenues includes revenues for the tour portion of acruise when a land tour package is sold along with a cruise by either Holland America Line or Princess.These intersegment tour revenues, which are included in the Tour and Other segment, are eliminated directlyagainst the North America cruise brands’ segment revenues and operating expenses in the line “Intersegmentelimination.”

(b) Carnival plc consists principally of the EAA cruise brands.(c) Includes impairment charge reversals to income of $17 million for Costa Celebration, $16 million for Costa

neoClassica and $3 million for Grand Holiday, partially offset by an impairment charge of $14 million forCosta neoRiviera.

(d) Tour and Other segment assets primarily include hotels and lodges in the state of Alaska and the CanadianYukon, motorcoaches used for sightseeing and charters, glass-domed railcars, which run on the AlaskaRailroad and Carnival Corporation & plc owned ships that it leased out under long-term charters tounaffiliated entities.

(e) Carnival Corporation consists primarily of cruise brands that do not form part of the Group; however, thesebrands are included in Carnival Corporation & plc and thus represent substantially all of the reconcilingitems. These North American Carnival Corporation cruise brands are Carnival Cruise Line, Holland AmericaLine, Princess and Seabourn. The U.S. GAAP vs. IFRS accounting differences principally relate todifferences in the carrying value of ships and related depreciation expenses.

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(f) Previously reported Carnival Corporation results changed as a result of our revision of prior period financialstatements (see “Note 1- General – Revision of Prior Period Financial Statements” of the DLC FinancialStatements, which are included in Annex 1, but do not form part of these Carnival plc financial statements) asfollows (in millions):

November 30, 2014

North America Cruise BrandsAs Previously

Reported Adjustment As Revised

Operating costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,418 $ 18 $ 6,436Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 959 $ 2 $ 961Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,061 $ (20) $ 1,041Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,765 $ (84) $ 22,681

(g) Includes impairment charges of $31 million for Grand Holiday and $22 million for Grand Celebrationpartially offset by a $37 million gain on the sale of Costa Voyager.

IFRS 8 also requires disclosure of certain geographical information that is in addition to the requirement todisclose information reviewed by the CODM. The Group’s revenues by geographical areas, which are based onwhere our guests are sourced and not the cruise brands on which they sailed, were as follows (in millions):

Years Ended November 30,2015 2014

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,109 $ 1,049Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,412 4,925Australia and Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,090 1,014Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 220

$ 6,788 $ 7,208

Substantially all of our cruise assets are ships and our cruise capital expenditures are substantially all incurred forships and ships under construction. Our ships move between geographic regions and, therefore, it is notmeaningful to allocate these ship assets and ship capital expenditures to particular regions. In addition, segmentinformation relating to liabilities is not reported to or used by the CODM in order to assess performance andallocate resources to a segment. Our Tour operations’ guests are primarily sourced from North America, which iswhere all our Tour operations’ assets and capital spending are located.

NOTE 3 - Income, Expense and Auditors’ Remuneration

Operating lease expenses were as follows (in millions):

Years Ended November 30,2015 2014

Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 570 $ 444Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 27Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6

$ 600 $ 477

Auditors’ remuneration was as follows (in millions):

Fees payable to the Company’s auditor for the audit of theGroup and Company financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $ 1

Fees payable to the Company’s auditor and their associates for the audit ofthe Company’s subsidiaries pursuant to legislation . . . . . . . . . . . . . . . . . . . . . . . . 1 1

$ 2 $ 2

In addition, during 2015, there were non-audit service fees that were payable to the auditor of $0.2 million ($0.3million in 2014).

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During 2015, the Group recognised:

• a $36 million ship impairment charge reversal to income for Costa Celebration (formerly GrandCelebration), Costa neoClassica and Grand Holiday resulting from these ships having been impairedin prior years and their subsequent performance being better than expected and

• a $14 million ship impairment charge for Costa neoRiviera.

During 2014, the Group recognised:

• ship impairment charges of $31 million for Ibero’s Grand Holiday and $22 million for GrandCelebration and

• a $37 million gain from the sale of Costa Voyager.

Refer to Note 10 for ship impairments and sales discussion.

Selling and administrative expenses include advertising and promotion expenses of $283 million and $292million and payroll and related expenses of $378 million and $388 million in 2015 and 2014, respectively.

During 2015, the Group recognized $24 million of restructuring expenses related to certain AIDA and Costaoperations.

NOTE 4 - Income and Other Taxes

Income tax (expense) benefit, comprised entirely of overseas taxes incurred outside the UK, was as follows (inmillions):

Years Ended November 30,2015 2014

Current taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(34) $(31)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 11

Income tax expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(30) $(20)

The total income tax (expense) benefit is reconciled to income taxes calculated at the UK standard tax rate asfollows (in millions):

Years Ended November 30,2015 2014

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 801 $ 763

Notional tax expense at UK standard tax rate (2015-20.3% and 2014-21.7%) . . . . . (163) (165)Effect of Italian and UK tonnage tax and other overseas taxes at different rates . . . 133 145

$ (30) $ (20)

We do not expect to incur income taxes on future distributions of undistributed earnings of foreign subsidiariesand, accordingly, no deferred income taxes have been provided for the distribution of these earnings. All interestexpense related to income tax liabilities is included in income tax expense. In addition, virtually all jurisdictionswhere our ships call impose taxes, fees and other charges based on guest counts, ship tonnage, passenger capacityor some other measure, and these taxes, fees and other charges are included in commissions, transportation andother costs and other ship operating expenses.

UK and Australian Income Tax

Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to enterthe UK tonnage tax under a rolling ten-year term and, accordingly, reapply every year. Companies to which thetonnage tax regime applies pay corporation taxes on profits calculated by reference to the net tonnage ofqualifying ships. UK corporation tax is not chargeable under the normal UK tax rules on these brands’ relevantshipping income. Relevant shipping income includes income from the operation of qualifying ships and fromshipping related activities.

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For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters,operate qualifying ships that are strategically and commercially managed in the UK. Companies within UKtonnage tax are also subject to a seafarer training requirement.

Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to normalUK corporation tax. Dividends received from subsidiaries of Carnival plc doing business outside the UK aregenerally exempt from UK corporation tax.

P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the cruisesegment of the Australian vacation market are exempt from Australian corporation tax by virtue of the UK/Australian income tax treaty.

Italian and German Income Tax

In early 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapplyfor an additional ten-year period beginning in early 2025. Companies to which the tonnage tax regime appliespay corporation taxes on shipping profits calculated by reference to the net tonnage of qualifying ships.

Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime willbe taxed at an effective tax rate of 5.5%.

Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Germany/Italyincome tax treaty.

Income and Other Taxes in Asian Countries

Substantially all of our brands’ income from their international operation in Asian countries is exempt from localcorporation tax by virtue of relevant income tax treaties.

U.S. and State Income Taxes

Our domestic U.S. operations, principally the hotel and transportation business of Holland America PrincessAlaska Tours, are subject to federal and state income taxation in the U.S.

Certain of the Company’s subsidiaries are subject to various U.S. state income taxes generally imposed on eachstate’s portion of the U.S. source income subject to U.S. federal income taxes. However, the state of Alaskaimposes an income tax on its allocated portion of the total income of our companies doing business in Alaska andcertain of their subsidiaries.

NOTE 5 - Dividends

The Board of Directors declared regular quarterly dividends for the first and second quarters at $0.25 per shareand for the third and fourth quarters at $0.30 per share in 2015 ($0.25 per share for each quarter in 2014). Ourquarterly dividend declarations amounted to $54 million in the first and second quarters and $65 million and $66million in the third and fourth quarters, respectively, or an aggregate of $239 million in 2015 and $54 million perquarter or an aggregate of $216 million in 2014.

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NOTE 6 - Earnings per Share

Our basic and diluted earnings per share were computed as follows (in millions, except per share data):

Years Ended November 30,2015 2014

Net income for basic and diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 771 $ 743

Weighted-average ordinary shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 215Dilutive effect of equity plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

Diluted weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 216

Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.57 $3.45

Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.56 $3.44

As described in Note 1, Carnival Corporation and Carnival plc operate as a DLC. Under the contracts governingthe DLC arrangement, the Carnival Corporation & plc consolidated earnings accrue equally to each share ofCarnival Corporation common stock and each Carnival plc ordinary share. For this reason, the U.S. GAAPearnings per share for Carnival Corporation & plc are provided for information on page 71.

The weighted-average number of ordinary shares has been reduced for shares in the Company held by theCompany’s Employee Benefit Trust for the satisfaction of equity awards that have not vested unconditionally.These Employee Benefit Trust held shares do not receive any dividends.

The dilutive shares relate to ordinary shares to be issued on vesting of restricted stock units, performance-basedshare awards and market-based share awards and the exercise of employee share options. Details of employeeshare-based compensation are discussed in Note 20.

NOTE 7 - Cash and Cash Equivalents

Cash and cash equivalents were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Cash on ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46 $ 50 $ 21 $ 16Cash used for current operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 79 41 27Money market funds and time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685 88 669 64

$ 821 $ 217 $ 731 $ 107

NOTE 8 – Trade and Other Receivables, Net

Trade and other receivables, net, were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Trade, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 116 $ 111 $ 52 $ 55VAT, income taxes and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 34 20 17

$ 148 $ 145 $ 72 $ 72

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The aging of trade receivables was as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87 $ 99 $ 49 $ 521 to 30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7 2 231 to 90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4 1 191 to 180 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 1 1Over 180 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 7 - -

$ 121 $ 120 $ 53 $ 56

The allowance account movements were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Allowance for bad debts at December 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 $ 10 $ 1 $ 2Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (1) - -Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) - - (1)

Allowance for bad debts at November 30, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 $ 9 $ 1 $ 1

NOTE 9 - Inventories, Net

Inventories, net were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Food and beverage provisions and hotel and restaurant products andsupplies, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80 $ 69 $ 27 $ 22

Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 39 11 14Merchandise held for resale, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 15 1 -Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4 6 2

$ 126 $ 127 $ 45 $ 38

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NOTE 10 - Property and Equipment

Property and equipment movements were as follows (in millions):

Group Company

Ships and shipImprovements

Otherproperty and

equipment TotalShips and shipimprovements

Otherproperty and

equipment Total

Cost at November 30, 2013 . . . . . . . . . . . . . $18,048 $1,341 $19,389 $ 5,860 $103 $ 5,963Exchange movements . . . . . . . . . . . . . . . . . . . (1,293) (85) (1,378) (272) (21) (293)Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926 152 1,078 747 33 780Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (141) (7) (148) (671) (2) (673)

Cost at November 30, 2014 . . . . . . . . . . . . . 17,540 1,401 18,941 5,664 113 5,777Exchange movements . . . . . . . . . . . . . . . . . . . (2,137) (61) (2,198) (320) (8) (328)Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,222 114 1,336 964 42 1,006Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70) (75) (145) (36) (4) (40)

Cost at November 30, 2015 . . . . . . . . . . . . . $16,555 $1,379 $17,934 $ 6,272 $143 $ 6,415

Accumulated depreciation atNovember 30, 2013 . . . . . . . . . . . . . . . . . . . $ (4,406) $ (680) $ (5,086) $(1,549) $ (53) $(1,602)

Exchange movements . . . . . . . . . . . . . . . . . . . 305 77 382 80 7 87Depreciation and amortisation . . . . . . . . . . . (580) (85) (665) (206) (14) (220)Impairments (a) . . . . . . . . . . . . . . . . . . . . . . . . . (53) - (53) - - -Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 5 140 20 2 22

Accumulated depreciation atNovember 30, 2014 . . . . . . . . . . . . . . . . . . . (4,599) (683) (5,282) (1,655) (58) (1,713)

Exchange movements . . . . . . . . . . . . . . . . . . . 596 25 621 115 5 120Depreciation and amortisation . . . . . . . . . . . (567) (73) (640) (235) (12) (247)Impairment reversals (losses), net (b) . . . . 22 - 22 - - -Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 28 90 31 4 35

Accumulated depreciation atNovember 30, 2015 . . . . . . . . . . . . . . . . . . . $ (4,486) $ (703) $ (5,189) $(1,744) $ (61) $(1,805)

Net book valueAt November 30, 2015 . . . . . . . . . . . . . . . . . . $12,069 $ 676 $12,745 $ 4,528 $ 82 $ 4,610

At November 30, 2014 . . . . . . . . . . . . . . . . . . $12,941 $ 718 $13,659 $ 4,009 $ 55 $ 4,064

(a) In November 2014, we entered into a bareboat charter/sale agreement under which the 1,440-passengercapacity Grand Holiday was chartered to an unrelated entity in January 2015 through March 2025. Under thisagreement, ownership of Grand Holiday will be transferred to the buyer in March 2025. This transaction didnot meet the criteria to qualify as a finance lease and, accordingly, it will be accounted for as an operatinglease whereby we will recognize the charter revenue over the term of the agreement. As a result of thistransaction, we performed a ship impairment review and recognised a $31 million impairment charge duringthe fourth quarter of 2014. The estimated fair value of the ship was substantially all determined based on theexpected collectability of the bareboat charter payments, which is considered a Level 3 input.

Due to the expected absorption of Ibero’s operations into Costa in November 2014, and certain ship-specific factsand circumstances, such as size, age, condition, viable alternative itineraries and historical operating cash flows, weperformed discounted future cash flow analysis of Ibero’s Grand Celebration as of May 31, 2014 to determine ifthe ship was impaired. The principal assumptions used in our discounted cash flow analysis consisted of forecastedfuture operating results, including net revenue yields and net cruise costs including fuel prices, and the estimatedresidual value, which are all considered Level 3 inputs, and the then expected transfer of Grand Celebration intoCosta in November 2014. Based on its discounted cash flow analysis, we determined that the net carrying value forGrand Celebration exceeded its estimated discounted future cash flows. As a result, we recognised a $22 millionship impairment charge during the second quarter of 2014.

Also, during the 2014 second quarter, Costa Voyager was sold and we recognised a $37 million gain as a reductionof impairment charges.

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(b) At July 31, 2015, we performed discounted future cash flow analysis of certain Costa ships to determine ifthese ships were impaired based on similar assumptions noted above. Based on its discounted cash flowanalysis, we determined that the net carrying value for Costa neoRiviera exceeded its estimated discountedfuture cash flows. As a result, we recognised a $14 million ship impairment charge during the third quarter of2015. In addition, based on their discounted cash flow analyses, we recognized ship impairment chargereversals to income of $36 million for Costa Celebration, Costa neoClassica and Grand Holiday during2015.

The determination of fair value includes numerous assumptions that are subject to various risks and uncertainties,unless a comparable, viable actively-traded market exists, which is usually not the case for cruise ships. Ourships’ fair values are typically estimated based either on ship sales price negotiations and the associatedprobability of the ship selling or discounted future cash flows.

We believe that we have made reasonable estimates and judgments in determining whether ships have beenimpaired. However, if there is a change in assumptions used or if there is a change in the conditions orcircumstances influencing fair values in the future, then we may need to recognise an impairment loss.

Ships under construction include progress payments for the construction of new ships, as well as design andengineering fees, capitalised interest, construction oversight costs and various owner supplied items. Capitalisedinterest, substantially all on our ships under construction, amounted to $7 million in 2015 ($10 million in 2014).The interest capitalisation rate is based on the weighted-average interest rates applicable to borrowings within theDLC during each period. During 2015, the average capitalisation rate was 2.9% (3.2% during 2014).

During 2015, the Group and Company took delivery of the 3,647-passenger capacity P&O Cruises (UK)’sBritannia and during 2014 the Group took delivery of the 3,692 passenger Costa Diadema. In addition, during2015 and 2014, the Group made stage payments for ships under construction.

In December 2014, we entered into a bareboat charter/sale agreement under which the 1,492-passenger capacityCosta Celebration was chartered to an unrelated entity in December 2014 through August 2021. Under thisagreement, ownership of Costa Celebration will be transferred to the buyer in August 2021. This transaction didnot meet the criteria to qualify as a finance lease and, accordingly, it was accounted for as an operating leasewhereby we recognise the charter revenue over the term of the agreement.

At November 30, 2015, the cost of ships under construction included above totalled $255 million ($315 millionat November 30, 2014). At November 30, 2015, the net book value of ship assets is shown after deductinggovernment construction grants of $104 million ($129 million at November 30, 2014). At November 30, 2015,the book value of our land was $33 million ($39 million at November 30, 2014).

See Note 3 for additional ship-related discussions.

NOTE 11 - Goodwill and Other Intangible Assets

Goodwill movements were as follows (in millions):

Group CompanyGoodwillGoodwill Other Intangible Assets

At November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $723 $ - $179Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (54) - (7)

At November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 - 172Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 53 -Charges for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (2) -Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (81) (1) (7)

At November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $588 $50 $165

At November 30, 2015 and 2014, all of our cruise brands carried goodwill, except for P&O Cruises (UK) andP&O Cruises (Australia), and the carrying value of our CGUs’ or cruise brands’ goodwill balance was asfollows: AIDA, $122 million (2014 $143 million), Costa, $301 million (2014 $354 million) and Cunard $165million (2014 $172 million). As of July 31, 2015, we performed our annual goodwill impairment reviews toassess the recoverable amount of each cruise brand’s goodwill. For the impairment reviews, the estimatedrecoverable amounts were based on the higher of the cruise brands’ fair value less costs to sell and its value in

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use. Recoverable amounts for our brands that carried goodwill were determined using the 10-year discountedfuture cash flow analysis. Our annual impairment reviews resulted in no goodwill impairments.

The principal assumptions, all of which are considered Level 3 inputs, used in our cash flow analyses relate toforecasting future operating results and are as follows:

- net revenue yields and net cruise costs including fuel prices;- capacity changes, including the expected deployment of vessels into, or out of, the cruise brands,

including, but not limited to, the new ships discussed in Note 22;- weighted-average cost of capital pre-tax discount rates, which ranged from 6.0% to 11.1% of market

participants, adjusted for the risk attributable to the geographic region in which the brands operate and- capital expenditures, terminal values and a range of 0.0% to 3.0% for long-term perpetuity growth

rates.

The cash flows were estimated based on those a market participant would expect to derive from the businesses.For all the cruise brands, we used relevant past experience in determining an estimate of future cash flows.

For AIDA we have significant headroom and based on the sensitivity analysis performed no reasonably possiblechanges in the assumptions would cause the carrying amount of the brand’s goodwill to exceed its recoverableamount.

The determination of our cruise brands’ goodwill recoverable amounts includes numerous assumptions that aresubject to various risks and uncertainties. We believe that we have made reasonable estimates and judgments indetermining whether our goodwill has been impaired. However, if there is a change in assumptions used or ifthere is a change in the conditions or circumstances influencing fair values in the future, then we may need torecognise an impairment charge.

The fair value of the Costa goodwill currently exceeds the carrying value by more than $750 million. Changes inthe individual assumptions would cause the recoverable amount to fall below the carrying amount as follows:

- a reduction in the perpetuity growth rate after 10 years from the 3.0 % assumption applied to a revisedassumption of a 1.0% growth rate or less or

- an increase in the discount rate from the 11.1% assumption applied to a revised assumption of 12.1% ormore or

- a reduction in the projected operating cash flows across future years by 12.5% or more or- an increase in fuel price to $759 per metric ton (or 17%) through 2017 and then a 2% annual increase

thereafter or- the inability to achieve a net revenue yield growth of 4.2% for the next four years and 1.7% thereafter.

The fair value of the Cunard goodwill currently exceeds the carrying value by almost $480 million. Changes inthe individual assumptions would cause the recoverable amount to fall below the carrying amount as follows:

- a reduction in the perpetuity growth rate after 10 years from an assumed increase of 2.5% compared toan assumed negative growth rate of 3.3% or

- an increase in the discount rate from the 9.0% assumption applied to a revised assumption of 11.4% ormore or

- a reduction in the projected operating cash flows across future years by 25.1% or more or- if there is one less ship in Cunard’s fleet or- an increase in fuel price to $954 per metric ton (or 43%) through 2019 and then a 2% annual increase

thereafter or- no increase in net revenue yields for the next three years and the inability to achieve net revenue yield

growth of 2.5% thereafter.

Our brands’ estimated recoverable amount significantly exceeded their carrying amount and there have not beenany events or circumstances subsequent to July 31, 2015, which we believe require us to perform interimgoodwill impairment tests.

Other intangible assets consist of port usage rights and are stated at cost less accumulated amortization, which iscalculated to amortise their costs on a straight-line basis over their expected useful lives. Expected useful livesare reviewed annually.

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NOTE 12 - Other Assets

Other assets were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Other receivables, including VAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58 $ 68 $ - $ -Insurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 89 - -Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 42 29 25Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 11 - -Derivative contract receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 7 6

$ 144 $ 216 $ 36 $ 31

Substantially all deferred tax assets relate to net operating losses expected to be recovered against future taxableincome. At November 30, 2015, the Group had gross deferred tax assets of $124 million ($132 million atNovember 30, 2014) and the Company had gross deferred tax assets of $104 million at both November 30, 2015and 2014, which were not recognised.

NOTE 13 - Investments in Subsidiaries

The Company’s investments in subsidiaries’ movements were as follows (in millions):

At November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,106Capital contributions to a subsidiary (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,243Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (220)

At November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,129Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (412)

At November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,717

(a) The capital contributions enabled a subsidiary to fund a ship addition and repay intercompany debt.

At November 30, 2015, the Company’s principal operating subsidiary was Costa Crociere S.p.A., which isincorporated in Italy and is 99.97% directly owned by the Company, and principally affects the figures shown inthe Group financial statements. This subsidiary owns and operates the Costa and AIDA cruise brands, andthrough November 30, 2014, the Ibero, Cunard, P&O Cruises (Australia), P&O Cruises (UK) and the leasedships from the Carnival Cruise Line and Princess brands are divisions of the Company, whereas AIDA is abranch of Costa.

The Company’s subsidiaries, whose ownership interest is through ordinary shares, including the UK subsidiariesexempt from the requirement to prepare individual audited accounts or individual accounts, (as further specifiedbelow) for the year ended November 30, 2015 are as follows:

Company

UKCompanies

HouseRegistration

NumberCountry of

IncorporationEffectiveInterest

A. C. N. 098290834 Pty. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Australia 100%AIDA Kundencenter GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Germany 100%Air-Sea Holiday GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Switzerland 100%Alaska Hotel Properties LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Barcelona Cruise Terminal SLU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 100%Carnival UK Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03141044 United Kingdom 100%Carnival Celebration, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Carnival Corporation & plc Asia (Hong Kong) Limited . . . . . . . . Hong Kong 100%Carnival Corporation & plc Asia Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . Singapore 100%

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Company

UKCompanies

HouseRegistration

NumberCountry of

IncorporationEffectiveInterest

Carnival Corporation Hong Kong Limited . . . . . . . . . . . . . . . . . . . . . Hong Kong 100%Carnival Corporation Korea Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . Korea 100%Carnival FC B.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands 99.99%Carnival Japan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Japan 100%Carnival Maritime GMBH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Germany 100%Carnival Technical Services, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Japan 100%CC U.S. Ventures, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Costa Crociere PTE Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Singapore 100%Costa Crociere S.p.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 99.97%Costa Cruceros S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina 95%Costa Cruise Lines Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Costa Cruise Lines UK Limited (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02482631 United Kingdom 100%Costa Cruises Shipping Services (Shanghai)

Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 100%Costa Cruises Travel Agency (Shanghai) Co., Ltd. . . . . . . . . . . . . . China 100%Costa Cruzeiros Agencia Maritime e Turismo Ltda. . . . . . . . . . . . Brazil 100%Costa International B.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands 100%Costa Kreuzfahrten GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Switzerland 100%Cozumel Cruise Terminal S.A. de C.V. . . . . . . . . . . . . . . . . . . . . . . . . Mexico 99%Cruise Terminal Services S.A. de C.V. . . . . . . . . . . . . . . . . . . . . . . . . Mexico 99%Cruise Ships Catering & Services International N.V. . . . . . . . . . . . Curacao 100%Cunard Celtic Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 100%Cunard Line Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bermuda 100%F.P.M. SAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . French Polynesia 100%Fathom Travel Ltd. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9608240 United Kingdom 100%Fleet Maritime Services (Bermuda) Limited . . . . . . . . . . . . . . . . . . . Bermuda 100%Fleet Maritime Services Holdings (Bermuda) Limited . . . . . . . . . Bermuda 100%Fleet Maritime Services Holdings (India) Ltd. . . . . . . . . . . . . . . . . . India 100%Gibs, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Global Fine Arts, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Global Shipping Service (Shanghai) Co., Ltd. . . . . . . . . . . . . . . . . . China 100%Grand Cruise Investments Unipessoal LdA . . . . . . . . . . . . . . . . . . . . Portugal 100%Grand Cruise Shipping Unipessoal LdA . . . . . . . . . . . . . . . . . . . . . . . Portugal 100%Holding Division Iberocruceros SLU . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 100%Holland America Line Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Holland America Line U.S.A., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%HSE Hamburg School of Entertainment GmbH . . . . . . . . . . . . . . . . Germany 100%Ibero Cruzeiros Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil 99.9%Iberocruceros SLU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 100%International Cruise Services, S.A. de C.V. . . . . . . . . . . . . . . . . . . . . Mexico 100%International Maritime Recruitment Agency, S.A. de C.V. . . . . . Mexico 100%Milestone N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Curacao 100%Navitrans B.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands 100%Operadora Catalina S.r.L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dominican Republic 100%P&O Princess American Holdings (a) . . . . . . . . . . . . . . . . . . . . . . . . . 01453164 United Kingdom 100%P&O Princess Cruises International Limited (b) . . . . . . . . . . . . . . . 03902746 United Kingdom 100%P&O Princess Cruises Pension Trustee Limited (a) . . . . . . . . . . . . 04069014 United Kingdom 100%P&O Princess Purchasing Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00511878 United Kingdom 100%P&O Properties (California), Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%P&O Travel Limited (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0773151 United Kingdom 100%Prestige Cruises Management S.A.M. . . . . . . . . . . . . . . . . . . . . . . . . . Monaco 96%Prestige Cruises N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Curacao 100%Princess Cruises & Tours, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Princess U.S. Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%

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HouseRegistration

NumberCountry of

IncorporationEffectiveInterest

Royal Hyway Tours, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%SeaVacations Limited (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03681272 United Kingdom 100%SeaVacations UK Limited (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03633566 United Kingdom 100%Spanish Cruise Services N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Curacao 100%Tour Alaska, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Westmark Hotels of Canada, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Canada 100%Westmark Hotels, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%Westours Motor Coaches, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100%

(a) Exempt from preparing individual accounts by virtue of Section 394A of the Companies Act 2006 and fromfiling individual accounts by virtue of section 448A of the Companies Act 2006.

(b) Exempt from preparing individual audited accounts by virtue of Section 479A of the Companies Act 2006.

In order to obtain the above filing exemptions, the Company has guaranteed the outstanding liabilities to whicheach of the above companies is subject at November 30, 2015.

NOTE 14 - Unsecured Debt

Long-term debt and short-term borrowings consisted of the following (in millions):

Group (a) Company (a)November 30,

2015 2014 2015 2014

Long-Term DebtExport Credit Facilities

Fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 134 $ 198 $ 134 $ 198Euro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 306 - -Euro floating rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,236 1,136 1,131 1,000

Bank LoansEuro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 187 132 187Floating rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 150 150 150

Private Placement NotesEuro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 153 51 152

Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,936 2,130 1,598 1,687

Current Portion of Long-Term DebtExport Credit Facilities

Fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 65 65 65Euro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 35 - -Euro floating rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 134 140 121

Bank LoansEuro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 34 28 34Euro floating rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 249 - 249

Private Placement NotesEuro fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 1 80 1

Current Portion of Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 354 518 313 470

Short-Term BorrowingsEuro floating rate bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 14 - -

Short-Term Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 14 - -

Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,320 $ 2,662 $ 1,911 $ 2,157

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(a) The debt table does not include the impact of our foreign currency and interest rate swaps. Amounts fallingdue within one year include accrued interest. The floating rate is based on LIBOR or EURIBOR.Substantially all of our fixed rate debt can only be called or prepaid by incurring additional costs. Furtherdetail relating to the Group’s policies on managing currency and interest rate risks and additional informationon debt and committed financings are provided in Notes 1 and 24 herein, within the Business Review sectionof the Strategic Report and in Notes 6 and 11 of the DLC Financial Statements, which are included inAnnex 1, but do not form part of these Carnival plc financial statements.

(b) In 2015, we borrowed $472 million under a euro-denominated export credit facility, the proceeds of whichwere used to pay for a portion of P&O Cruises (UK)’s Britannia purchase price. The debt is due in semi-annual instalments through February 2027.

Revolving Credit Facilities

In April 2015, Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc’ssubsidiaries exercised their option to extend the termination date of their five-year multi-currency revolvingcredit facility (the “Facility”) of $2.5 billion (comprised of $1.7 billion, €500 million and £150 million) fromJune 2019 to June 2020, which was approved by each bank. We also have an option to extend this Facilitythrough June 2021 subject to the approval of each bank. The Facility currently bears interest at LIBOR/EURIBOR plus a margin of 40 basis points (“bps”). The margin varies based on changes to CarnivalCorporation’s and Carnival plc’s long-term senior unsecured credit ratings. We are required to pay a commitmentfee of 35% of the margin per annum on any undrawn portion. We will also incur an additional utilization fee of10 bps, 20 bps or 40 bps if equal to or less than one-third, more than one-third or more than two-thirds of theFacility, respectively, is drawn on the total amount outstanding.

At November 30, 2015, we have one other undrawn revolving credit facility for $300 million that expires in2020, and provides us with additional liquidity. At November 30, 2015, $2.8 billion was available under all ofour revolving credit facilities.

Scheduled annual maturities of our debt were as follows (in millions):

Group CompanyNovember 30,

Fiscal 2015 2014 2015 2014

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 532 $ 4702016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 384 500 $ 313 4542017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 257 375 2112018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 290 248 2442019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 218 188 1722020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 206 141 161Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830 659 646 445

$ 2,320 $ 2,662 $ 1,911 $ 2,157

Our debt is denominated in different currencies, including the effect of foreign currency swaps, as follows (inmillions):

Group CompanyNovember 30,

2015 2014 2015 2014

Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,014 $ 2,251 $ 1,562 $ 1,746U.S. dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 411 349 411

$ 2,320 $ 2,662 $ 1,911 $ 2,157

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NOTE 15 - Other Long-Term Liabilities

Other long-term liabilities were as follows (in millions):

Group CompanyNovember 30,

2015 2014 2015 2014

Claims reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54 $ 120 $ 8 $ 13Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 41 28 29Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 32 - -Post-employment benefits (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 37 1 8Derivative payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 21 18 21Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 9 - 1Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 23 6 6

$ 212 $ 283 $ 61 $ 78

The Group and Company claims reserve includes estimated liabilities for crew, guest and other third party claimsand the Group’s claims reserve primarily all related to the January 2012 ship incident.

Deferred income tax liabilities are principally related to differences between the (1) book and tax methods ofcalculating depreciation expense in our Holland America Princess Alaska Tours business and other NorthAmerica operations and (2) the timing of recognising our Cozumel, Mexico port hurricane insurance settlement.

We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest ratepayments in exchange for making fixed interest rate payments. At November 30, 2015, these interest rate swapagreements effectively changed $418 million of EURIBOR-based floating rate euro debt to fixed rate euro debt.These interest rate swaps settle through March 2025.

Other liabilities of the Group and Company primarily include liabilities for contractual disputes and propertylease obligations. These lease obligations are expected to be settled over their term.

NOTE 16 - Share Capital

The issued and fully paid Carnival plc ordinary share capital was as follows (dollars in millions):

Number of SharesShare

Capital

At November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,474,909 $ 358Shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,691 -

At November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,496,600 358Shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,363 -

At November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,634,963 $ 358

During 2015, the Company issued 135,104 ordinary shares (17,889 ordinary shares in 2014) following theexercise of share options, for total consideration of $6 million ($1 million in 2014) and for the issuance ofRestricted Share Awards (“RSAs”), Restricted Stock Units (“RSUs”) and Performance-Based Shares (“PBSs”)and Market-Based Shares (“MBSs”) and issued 3,259 ordinary shares (3,802 ordinary shares in 2014) inconnection with the Carnival plc Employee Stock Purchase Plan. In addition, 300,000 ordinary shares wereissued in 2015 (301,000 ordinary shares in 2014) to the Carnival plc Employee Benefit Trust, which are notincluded above as they were recorded as treasury stock. At November 30, 2015, there were 1,820,000 cumulativeoutstanding ordinary shares issued to the Carnival plc Employee Benefit Trust.

The Company has 50,000 allotted but unissued redeemable preference shares of £1 each. These redeemablepreference shares are entitled to a cumulative fixed dividend of 8% per annum. The preference shares, whichcarry no voting rights, rank behind other classes of shares in relation to the payment of capital on certain types ofdistributions from the Company. The Company also has two allotted and issued subscriber shares of £1 each, thatcarry no voting rights and no right to receive any dividend or any amount paid on return of capital. Finally, the

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Company has one special voting share of £1 issued to Carnival Corporation in connection with the DLCtransaction to enable Carnival Corporation’s shareholders to vote as a group on Company shareholder matters.

NOTE 17 - Reserves and Other Equity Activity

The Group merger reserve relates to the difference between the book value and the fair value of certainbusinesses sold to Carnival Corporation during 2004 as part of a DLC corporate restructuring, which wasaccounted for as a group reconstruction.

At November 30, 2015 and 2014, the Carnival plc Employee Benefit Trust held 369,752 and 363,793 ordinaryshares of Carnival plc, respectively, with an aggregate par value of $0.6 million at both November 30, 2015 and2014. At November 30, 2015, the market value of these shares was $19 million ($16 million at November 30,2014). If they had been sold at this market value there would have been no tax liability in either 2015 or 2014 onthe capital gain arising from the sale.

The income attributable to shareholders of the Company was $0.9 billion in 2015 ($0.2 billion in 2014). The2015 income included $0.6 billion of dividends from a subsidiary. Retained earnings consisted of $4.7 billion($4.1 billion in 2014) of distributable reserves and $1.7 billion of nondistributable reserves at both November 30,2015 and 2014.

In 2015, our Board of Directors had authorised, subject to certain restrictions, the repurchase of up to anaggregate of $1.0 billion of Carnival plc ordinary shares and/or Carnival Corporation common stock (the“Repurchase Program”). The Repurchase Program does not have an expiration date and may be discontinued bythe Boards of Directors at any time.

During 2015, Carnival Corporation repurchased 5.3 million shares of common stock for $276 million under theRepurchase Program. In 2014, there were no repurchases of Carnival Corporation common stock under theRepurchase Program. In 2015 and 2014, there were no repurchases of Carnival plc ordinary shares under theRepurchase Program. From December 1, 2015 through January 27, 2016, we repurchased 9.6 million shares ofCarnival Corporation common stock for $486 million under the Repurchase Program. On January 28, 2016, theBoard of Directors approved a modification of the Repurchase Program authorization that increased theremaining $213 million of authorized repurchases by $1.0 billion. From January 28, 2016, through February 19,2016, we repurchased 8.3 million shares of Carnival Corporation common stock for $369 million under theRepurchase Program. Accordingly, at February 19, 2016 the remaining availability under the RepurchaseProgram was $843 million.

In addition to the Repurchase Program, the Board of Directors authorised, in October 2008, the repurchase of upto 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares ofCarnival Corporation common stock under the Stock Swap (‘Stock Swap”) programs described below. Under theStock Swap programs, we sell shares of Carnival Corporation common stock and/or Carnival plc ordinary shares,as the case may be, and use a portion of the net proceeds to purchase an equivalent number of Carnival plcordinary shares or Carnival Corporation common stock, as applicable. We use the Stock Swap programs insituations where we can obtain an economic benefit because either Carnival Corporation common stock orCarnival plc ordinary shares are trading at a price that is at a premium or discount to the price of Carnival plcordinary shares or Carnival Corporation common stock, as the case may be. Any realised economic benefit underthe Stock Swap programs is used for general corporate purposes, which could include repurchasing additionalstock under the Repurchase Program. Depending on market conditions and other factors, we may repurchaseshares of Carnival Corporation common stock and/or Carnival plc ordinary shares under the Repurchase Programand the Stock Swap programs concurrently.

During 2014, no Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchasedunder the Stock Swap programs. During 2015, under the Stock Swap programs, CIL sold 5.1 million of Carnivalplc ordinary shares for net proceeds of $264 million. Substantially all of the net proceeds from these sales wereused to purchase 5.1 million shares of Carnival Corporation common stock. Carnival Corporation sold theseCarnival plc ordinary shares owned by CIL only to the extent it was able to repurchase shares of CarnivalCorporation common stock in the U.S. market on at least an equivalent basis. During 2015, no CarnivalCorporation common stock was sold or Carnival plc ordinary shares were repurchased under the Stock Swapprogram.

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From December 1, 2015 through February 19, 2016, CIL sold 0.9 million ordinary shares of Carnival plc throughits sales agent for net proceeds of $40 million. Substantially all of the net proceeds of these sales were used topurchase 0.9 million shares of Carnival Corporation common stock. Accordingly, at February 19, 2016 theremaining availability under the Stock Swap programs was 18.1 million Carnival ordinary shares and26.0 million shares of Carnival Corporation common stock.

Finally, the Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swapprogram require annual shareholder approval. The existing shareholder approval is limited to a maximum of21.5 million ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annual generalmeeting or July 13, 2016.

See the Statements of Changes in Shareholders’ Equity for movements in capital and other reserves.

NOTE 18 - Post-Employment Benefits

Employee Benefit Plans

Carnival plc is a contributing employer to three defined benefit pension plans: the P&O Princess Cruises (UK)Pension Scheme (“Company’s UK Plan”), the multiemployer Merchant Navy Officers Pension Fund(“MNOPF”) and the multiemployer Merchant Navy Ratings Pension Fund (“MNRPF”). The defined benefitplans are formally valued triennially by independent qualified actuaries. The valuations for these plans have beencarried out at regular intervals, as required by the applicable UK regulations.

The Company’s UK Plan’s assets are managed on behalf of the trustee by independent fund managers. TheCompany’s UK Plan is closed to new membership. Based on the most recent actuarial review of the Company’sUK Plan at March 31, 2014, it was determined that this plan was 102% funded.

The MNOPF is a funded defined benefit multiemployer plan in which British officers employed by companieswithin the Group have participated and continue to participate. The MNOPF is divided into two sections, the“New Section” and the “Old Section”, each of which covers a different group of participants, with the OldSection closed to further benefit accrual and to new membership and the New Section is only closed to newmembership. The MNOPF is accounted for as a defined benefit plan. Based on the most recent actuarial reviewof the New Section at March 31, 2014, it was determined that this plan was 87% funded and the deficits are to berecovered through funding contributions from participating employers. The formal triennial valuation for theMNOPF at March 31, 2015 is currently in-process and, accordingly, the results are not available as ofFebruary 19, 2016.

The Old Section covers predecessor employers’ officers employed prior to 1978 and is fully funded. InDecember 2012, the fund’s trustee completed a buy-in of the Old Section liabilities with a third-party insurer,whereby the insurer will pay the officers’ pension liabilities as they become due. Therefore, we believe ourobligation to share in any future funding is remote.

The MNRPF is also a defined benefit multiemployer pension plan available to certain of P&O Cruises (UK)’sshipboard British personnel. This plan is closed to new membership and based on the most recent actuarialreview at March 31, 2014, it was determined that this plan was 67% funded and, accordingly, has a fundingdeficit.

The recorded assets and liabilities on the Group’s balance sheets for the Company’s UK Plan, the Group’s shareof the MNOPF New Section and the MNRPF and other post-employment benefit liabilities were as follows (inmillions):

November 30,2015 2014

Long-term assetsEmployee benefit plan surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 10

Long-term liabilitiesEmployee benefit plan deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $ 8Other post-employment benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 29

$ 26 $ 37

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The employee benefit plan information provided below relates to the Company’s UK Plan, the Group’s share ofthe MNOPF New Section and the MNRPF.

The pension liabilities for accounting purposes were calculated at November 30, 2015 and 2014 by the Group’squalified actuary. The principal assumptions used were as follows:

Company’sUK Plan (%)

MNOPFNew Section (%) MNRPF (%)

2015 2014 2015 2014 2015 2014

Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 3.9 3.5 3.8 3.5 3.8Expected rates of salary increases . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 3.7 3.6 3.7 3.6 3.7Pension increases

Deferment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 2.2 2.1 2.2 2.1 2.2Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 3.0 2.9 3.0 2.9 3.0

Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 3.2 3.1 3.2 3.1 3.2

Assumptions regarding future mortality experience are set based on the Self-Administered Pension Schemestables for the “base” mortality tables. The weighted-average life expectancy in years of a 65-year old pensioneron the balance sheet dates was as follows:

November 30,2015 2014

Male . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8 22.5Female . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.7 25.1

The weighted-average life expectancy in years of a 45-year old future pensioner retiring at age 65 was as follows:

November 30,2015 2014

Male . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 25.1Female . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.4 27.8

With regard to the Company’s UK plan, management considers the types of investment classes in which pensionplan assets are invested and the expected compound return that the portfolio can reasonably be expected to earnover time, based on long-term real rates of return experienced in the respective markets.

The amounts recognised in the balance sheets for these plans were determined as follows (in millions):

November 30,2015 2014

Present value of obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (579) $ (572)Fair value of plans’ assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608 583

Net assets before restriction on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 11

Restriction on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (9)

Net (liabilities) assets recognized in balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1) $ 2

Actuarial gains and losses for these plans were as follows (in millions):

Years Ended November 30,2015 2014 2013 2012 2011

Losses on plans’ liabilities . . . . . . . . . . . . . . . . . . . . . . . $ (18) $ (37) $ (37) $(20) $ (13)Gains on plans’ assets, including restriction on

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 41 34 15 7

$ (15) $ 4 $ (3) $ (5) $ (6)

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The cumulative actuarial losses recognised in the Group or Company Statements of Shareholders’ Equity atNovember 30, 2015 for these plans were $49 million ($34 million at November 30, 2014).

The amounts recognised in the Group Statements of Income for these plans were as follows (in millions):

Years EndedNovember 30,2015 2014

Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7 $ 7Past service cost and losses on settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 9

Interest cost on defined benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 24Interest income on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) (23)

Net interest on defined benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) 1Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2

Cost recognised in Group Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 $ 12

Our estimated contributions expected to be paid into these plans during 2016 are $6 million for the Company’sUK Plan and $1 million for the MNOPF New Section.

Analysis of the movements in the balance sheet assets (liabilities) for these plans was as follows (in millions):

2015 2014

Net assets/(liabilities) at December 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ (23)Expenses (see above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) (12)Amounts recognised in the Group Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . (15) 4Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 32Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1

Net (liabilities)/assets at November 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1) $ 2

Changes in the present value of defined benefit obligations for these plans were as follows (in millions):

2015 2014

Present value of obligations at December 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 572 $ 543Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 24Contributions from employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18) (17)Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2Actuarial losses on plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 37Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) (25)

Present value of obligations at November 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 579 $ 572

The sensitivity of plan liabilities to changes in certain key assumptions were as follows:

- 0.5% reduction in the discount rate results in an increase of $55 million;- 0.5% increase in inflation rate results in an increase of $41 million and- 1 year increase in life expectancy would result in an increase of $19 million.

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Changes in the fair value of these plans’ assets were as follows (in millions):

2015 2014

Fair value of plans’ assets at December 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 583 $ 537Interest income on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 23Return on plan assets greater than discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 35Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 32Contributions from employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18) (17)Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (2)Gain due to change in share of MNRPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 -Exchange movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) (26)

Fair value of plans’ assets at November 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 608 $ 583

The actual gains on these plans’ assets in 2015 were $45 million ($58 million in 2014).

These plans’ assets were comprised as follows (in millions, except percentages):

November 30,2015 2014

% %Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 266 43.8 $ 238 40.8Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 14 2.4Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 16.0 96 16.5Fixed interest gilts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 17.7 116 19.8Liability matching investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 22.5 119 20.5

$ 608 100.0 583 100.0

Restriction on assets (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (9)

$ 578 $ 574

(a) These assets are restricted because they relate to multiemployer plans.

The Company’s net pension balance represents substantially all of the Group’s funded employee benefit plans.

Other Post-Employment Benefits

At November 30, 2015, other post-employment benefit liabilities included $7 million ($8 million atNovember 30, 2014) for a deferred bonus agreement to make annual payments to a former executive directorthrough 2019. In addition, under Italian employment legislation Costa is required to maintain a staff leavingindemnity. Under the indemnity employees are entitled to receive a payment, calculated by reference to theirlength of service and salary up to December 31, 2006, if they cease employment with Costa. These payments arenot conditional on employees reaching normal retirement age and following amendments to the legislationgenerate no further benefit accrual after December 31, 2006. At November 30, 2015, Costa had accrued aliability of $8 million ($11 million at November 30, 2014).

Defined Contribution Plans

The Group has several defined contribution plans available to most of its shore staff employees. During 2015, theGroup expensed $9 million ($8 million in 2014) for these plans.

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NOTE 19 - Key Management

The aggregate compensation of the Group’s key management was as follows (in millions):

Years Ended November 30,2015 2014

Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $ 1Salaries and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2Performance related bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4

Total short-term employment benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8

$ 15 $ 15

The key management, which consists of the Board of Directors, has responsibility and authority for controlling,directing and planning Carnival plc’s activities. Their aggregate compensation includes amounts paid by bothCarnival Corporation and Carnival plc.

During 2015 and 2014, there were no exercises of share options by executive directors of Carnival plc ordinaryshares. Further details on Directors’ remuneration, including RSA, RSU, PBS and MBS awards, share optionsand pension entitlements, are set out in Parts I and II of the Carnival plc Directors’ Remuneration Report.

NOTE 20 - Employees

The average number of our employees was as follows:

Years Ended November 30,2015 2014

Shore staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,571 6,493Sea staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,892 29,112

36,463 35,605

The aggregate payroll and related expenses included in both cruise operating expenses and selling andadministrative expenses were as follows (in millions):

Years Ended November 30,2015 2014

Salaries, wages and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 860 $ 838Social security and payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 55Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 27Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10

$ 940 $ 930

Share-based compensation included $0.2 million in 2015 and 2014 that were recharged by Carnival Corporationin respect of RSU, PBS and MBS awards, and options granted over Carnival Corporation common stock tocertain U.S.-based Carnival plc Group employees.

Equity Plans

We issue our share-based compensation awards under the Carnival plc stock plan, which has 8.2 million sharesavailable for future grant at November 30, 2015. This plan allows us to issue time-based share (“TBS”) awards,(which include restricted stock awards (“RSA”) and restricted stock units (“RSU”)), performance based share(“PBS”) awards and market based share (“MBS”) awards and stock options (collectively “equity awards”).Equity awards are principally granted to management level employees and members of our Boards of Directors.The plans are administered by a committee of our independent directors (the “Committee”) that determineswhich employees are eligible to participate, the monetary value or number of shares for which equity awards areto be granted and the amounts that may be exercised or sold within a specified term. These plans allow us to

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fulfill our equity award obligations using shares purchased in the open market or with unissued or treasuryshares. Certain equity awards provide for accelerated vesting if we have a change in control, as defined.

Our total share-based compensation expense was $9 million in 2015 ($10 million in 2014), the vast majority ofwhich is included in selling and administrative and the remainder in cruise payroll and related expenses.

TBS, PBS and MBS Awards

Carnival plc grants RSUs, which all vest at the end of three years and accrue forfeitable dividend equivalents oneach outstanding RSU, in the form of additional RSUs, based on dividends declared and have no voting rights.The share-based compensation expense for TBS awards is based on the quoted market price of the Carnival plcshares on the date of grant.

In 2015 and 2014, the Committee approved PBS awards to be granted to certain key Carnival plc executives. Theshare-based compensation expense for these PBS awards is based on the quoted market price of the Carnival plcshares, expected total shareholder return rank relative to certain peer companies on the date of grant and theprobability of Carnival Corporation & plc annual earnings target for each year over a three-year period beingachieved. Our 2015 and 2014 PBS awards also have a return on invested capital (“ROIC”) target. The PBSawards granted in 2015 and 2014 provide an opportunity to earn from zero to 200% of the number of targetshares underlying the award achieved for each year over a three-year period.

In 2014, the Committee approved MBS awards to be granted to certain of our senior executives. The MBSawards were valued at $3 million in 2014 as of the date of the grant. The share based compensation expense forMBS awards were based on the quoted market price of the Carnival plc ordinary shares on the date of grant andthe probability of certain market conditions being achieved. One-half of the MBS awards are expensed evenlyover a three-year period and the remaining half are expensed evenly over a four-year period. There were no MBSawards granted in 2015.

The Group awarded 211,704 RSUs and 31,563 PBSs at a weighted-average price of £30.93 in 2015 (252,042RSUs, 50,778 PBSs and 41,479 MBSs at a weighted-average price of £27.72 in 2014) principally to certainofficers and management level employees.

Prior to granting RSUs, PBSs and MBSs, the Committee granted options over ordinary shares, under the Carnivalplc 2005 Employee Share Plan and the Carnival plc Executive Share Option Plan, which have maximum terms ofup to seven years for options granted after October 2006. Options granted prior to October 2006 have maximumterms of up to ten years. The number and weighted-average exercise price of Carnival plc options were asfollows:

2015 2014

Number ofoptions

Weighted-averageexercise

priceNumber of

options

Weighted-averageexercise

price

Outstanding at December 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257,924 $ 46.55 739,707 $ 45.82Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (135,690) $ 44.54 (17,889) $ 39.87Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (122,234) $ 44.95 (463,894) $ 42.54

Outstanding and exercisable at November 30 . . . . . . . . . . . . . - $ - 257,924 $ 46.55

The obligations underlying the Company’s stock options, RSUs, PBSs and MBSs awards are settled through theissuance of Carnival plc ordinary shares.

NOTE 21 - Related Party Transactions

Group

During 2015, Holland America Line and Princess purchased land tours from us totalling $133 million ($128million in 2014) and packaged these land tours for sale with their cruises. In addition, during 2015 and 2014, wesold $1 million of shore excursions and transportation services to the Carnival Corporation group.

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At November 30, 2015, we owed $2.0 billion ($1.5 billion at November 30, 2014) to the Carnival Corporationgroup, which was unsecured and repayable on demand. The $2.0 billion liability to the Carnival Corporationgroup at November 30, 2015 is euro-denominated and bears interest ($1.3 billion at November 30, 2014).

During 2015, Fathom, a Group subsidiary, entered into a service agreement with Holland America Line andPrincess for the provision of services related to building occupancy, customer support, finance, human resources,information technology, legal and revenue operations. During 2015, $0.1 million was purchased from HollandAmerica and Princess by Fathom for these services.

Within the DLC arrangement, there are instances where we provide services to Carnival Corporation groupcompanies, and also where Carnival Corporation group companies provide services to us. For example, weparticipate in Carnival Corporation & plc’s group risk-sharing programs related to hull and machinery for shipsand crew and guest claims. Additional disclosures of related party transactions are discussed in Note 3 of theDLC Financial Statements, which are included in Annex 1, but do not form part of these Carnival plc financialstatements.

Within our operational and organisational structure, the key management personnel, as defined underIAS 24 “Related Party Disclosures,” consists of the Directors of the Company. Details of the Directors’remuneration are provided in the Carnival plc Directors’ Remuneration Report and any relevant transactions aregiven in the “Certain Relationships and Related Party Transactions” section, both of which are included withinthe Proxy Statement. The aggregate emoluments of our key management are shown in Note 19.

Company

At November 30, 2015 and 2014, Carnival Corporation owned 1,115,450, or 0.5% of the Company’s ordinaryshares, which are non-voting. During 2015 and 2014, CIL did not purchase any ordinary shares of Carnival plc.At November 30, 2015, CIL owned 25,792,144 or 11.9% (30,848,634 or 14.3% at November 30, 2014) of theCompany’s ordinary shares, which are also non-voting.

During 2015, CIL sold 5.1 million of Carnival plc ordinary shares for net proceeds of $264 million. Substantiallyall of the net proceeds from these sales were used to repurchase 5.1 million shares of Carnival Corporationcommon stock. Carnival Corporation sold these Carnival plc ordinary shares owned by CIL only to the extent itwas able to repurchase shares of Carnival Corporation common stock in the U.S. market on at least an equivalentbasis.

In both 2015 and 2014, Carnival Corporation and CIL received dividends on their Carnival plc ordinary shares inthe aggregate amount of $32 million.

During 2015, the Company had multi-year ship charter agreements with Princess and Carnival Cruise Line forfive (2014 four ships) and one of their ships, respectively, for us to operate year-round in Australia and/or Asia.Since September 2014, Carnival Cruise Line began time chartering another ship to us that operated seasonallyfrom Australia. Both the year-round and seasonal charters are accounted for as operating leases. Princess andCarnival Cruise Line are subsidiaries of Carnival Corporation. The total charter payments in 2015 were $570million ($444 million in 2014), which were included in other ship operating expenses.

In October 2015, P&O Cruises (Australia) purchased Ryndam and Statendam, which each have a passengercapacity of 1,260, for an aggregate of $243 million from Holland America Line and renamed them Pacific Ariaand Pacific Eden, respectively.

During 2015, the Company continued to provide a guarantee to the MNOPF for certain employees who havetransferred between subsidiaries of the Company.

The key management personnel of the Company comprise members of the Boards of Directors. Except for someshare-based compensation and some fees for UK-based services, the Directors did not receive any remunerationfrom the Company in 2015 and 2014, as their emoluments were borne by other companies within the DLC.Details of the Company’s share-based compensation to Directors are disclosed in the Carnival plc Directors’Remuneration Report, which is included in the Proxy Statement. The Company did not have any transactionswith the Directors during 2015 and 2014, other than those discussed in our Directors’ Remunerations Report.

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Transactions with Subsidiaries

The Company enters into loans with its subsidiaries at floating rates of interest, generally at rates agreed tobetween the parties from time to time. At November 30, 2015, the Company had a receivable from its subsidiarytotalling $212 million of a floating rate euro-denominated loan ($62 million at November 30, 2014). In additionat November 30, 2015, the Company had net receivables of $8 million from its subsidiaries, which are callableon demand ($15 million of net receivables callable on demand at November 30, 2014).

NOTE 22 - Commitments

Group

At November 30, 2015 including ship construction contracts entered into through February 19, 2016, we had nineships under contract for construction with an aggregate passenger capacity of 39,944 lower berths with four forAIDA, four for Costa and one for P&O Cruises (Australia). The estimated total cost of these ships is $7.3 billion,which includes the contract prices with the shipyards, design and engineering fees, capitalised interest,construction oversight costs and various owner supplied items. We have paid $0.3 billion through November 30,2015 and our remaining cruise ship commitments, aggregated based on each ship’s delivery date, are expected tobe $0.3 billion in 2016, $0.4 billion in 2017, $1.0 billion in 2018, $2.5 billion in 2019 and $2.8 billion in 2020.

Future minimum lease and port facility commitments, aggregated based on the lease and port facility expirationdates, for noncancellable operating leases and port facility agreements were as follows (in millions):

November 30,

Fiscal 2015 2014

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5672016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 650 92017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 62018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 152019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 112020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 460

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,132 $ 1,073

Company

At November 30, 2015, the Company had $742 million ($751 million in 2014) of contracted capitalcommitments relating to ship construction contracts. Ship capital commitments included contract payments to theshipyards, design and engineering fees, capitalised interest, construction oversight costs and various ownersupplied items.

NOTE 23 - Contingent Liabilities

The cross guarantees provided to and from Carnival Corporation as a result of the DLC arrangement, as furtherdiscussed within Notes 3, 6 and 11 of the DLC Financial Statements, which are included in Annex 1, but do notform part of these Carnival plc financial statements and within the Business Review section of the StrategicReport, provide that Carnival plc has guaranteed all Carnival Corporation’s indebtedness and certain other oftheir monetary obligations and Carnival Corporation has provided similar guarantees to Carnival plc.

Some of the debt contracts that we enter into include indemnification provisions that obligate the Group to makepayments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes andchanges in laws that increase lender capital costs and other similar costs. The indemnification clauses are oftenstandard contractual terms and were entered into in the normal course of business. There are no stated or notionalamounts included in the indemnification clauses, and the Group is not able to estimate the maximum potentialamount of future payments, if any, under these indemnification clauses. The Group has not been required tomake any material payments under such indemnification clauses in the past and, under current circumstances, wedo not believe a request for material future indemnification payments is probable.

As a result of a January 2012 ship incident, litigation claims and investigations, including, but not limited to,those arising from personal injury, loss of or damage to personal property, business interruption losses or

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environmental damage to any affected coastal waters and the surrounding areas, have been and may be assertedor brought against various parties, including us. The ultimate outcome of these matters cannot be determined atthis time. However, we do not expect these matters to have a significant impact on our results of operationsbecause we have insurance coverage for these types of third-party claims.

Additionally, in the normal course of our business, various claims and lawsuits have been filed or are pendingagainst us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount ofour liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels.Management believes the ultimate outcome of these claims and lawsuits will not have a material impact on theGroup and Company financial statements.

NOTE 24 - Financial Instruments

Fair Value Measurements

IFRS establishes a fair value hierarchy that prioritises the inputs used to measure fair value. The hierarchy givesthe highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This hierarchy requiresentities to maximise the use of observable inputs and minimise the use of unobservable inputs. The three levelsof inputs used to measure fair value are as follows:

• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilitiesthat we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quotedprices for identical or similar assets or liabilities in markets that are not active or market data other than quotedprices that are observable for the assets or liabilities.

• Level 3 measurements are based on unobservable data that are supported by little or no market activity and aresignificant to the fair value of the assets or liabilities.

There were no transfers between Level 1, Level 2 and Level 3 during 2015 and 2014. The fair value is the pricethat would be received to sell an asset or paid to transfer a liability in an orderly transaction between independentand knowledgeable market participants at the measurement date. Therefore, even when market assumptions arenot readily available, our own assumptions are set to reflect those that we believe market participants would usein pricing the asset or liability at the measurement date.

The fair value measurement of a financial asset or financial liability must reflect the nonperformance risk of thecounterparty and us. Therefore, the impact of our counterparty’s creditworthiness was considered when in anasset position, and our creditworthiness was considered when in a liability position in the fair value measurementof our financial instruments. Creditworthiness did not have a significant impact on the fair values of our financialinstruments at November 30, 2015 and 2014. Both the counterparties and we are expected to continue to performunder the contractual terms of the instruments. Considerable judgment may be required in interpreting marketdata used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein arenot necessarily indicative of the amounts that could be realised in a current or future market exchange.

The fair value of cross guarantees within the DLC arrangement (see Note 23) are not significant at November 30,2015 or 2014, and are not expected to result in any material loss.

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Financial Instruments that are Not Measured at Fair Value on a Recurring Basis

Financial assets were as follows (in millions):

Group

November 30, 2015 November 30, 2014Fair Value Fair Value

CarryingValue Level 1 Level 2 Level 3

CarryingValue Level 1 Level 2 Level 3

Cash and cash equivalents (a) . . . . . . . . . . $ 136 $ 136 $ - $ - $ 129 $ 129 $ - $ -Long-term other assets (b) . . . . . . . . . . . . . 3 - - 3 14 - - 13

$ 139 $ 136 $ - $ 3 $ 143 $ 129 $ - $ 13

Company

November 30, 2015 November 30, 2014Fair Value Fair Value

CarryingValue Level 1 Level 2 Level 3

CarryingValue Level 1 Level 2 Level 3

Cash and cash equivalents (a) . . . . . . . . . . $ 62 $ 62 $ - $ - $ 43 $ 43 $ - $ -

$ 62 $ 62 $ - $ - $ 43 $ 43 $ - $ -

(a) Cash and cash equivalents are comprised of cash on hand. Due to their short maturities the carrying valuesapproximate their fair values.

(b) At November 30, 2015 and 2014, long term other assets were substantially all comprised of notes receivable.The fair value of our note receivable was estimated using a risk-adjusted discount rate.

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The carrying and estimated fair values of debt were as follows (in millions) (a):

Group

November 30, 2015 November 30, 2014Fair Value Fair Value

CarryingValue Level 1 Level 2 Level 3

CarryingValue Level 1 Level 2 Level 3

Floating rateEuro export credit facilities . . . . . . . . . . $1,387 $ - $1,402 $ - $1,270 $ - $1,236 $ -Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . 150 - 149 - 150 - 149 -Euro bank loan . . . . . . . . . . . . . . . . . . . . . . - - - - 249 - 248 -Short-term euro bank loans . . . . . . . . . . 30 - 30 - 14 - 14 -

$1,567 $ - $1,581 $ - $1,683 $ - $1,647 $ -

Fixed rateBearing interest at 3.0% to 3.9% . . . . . $ 295 $ - $ 327 $ - $ 396 $ - $ 428 $ -Bearing interest at 4.0% to 6.9% . . . . . 327 - 358 - 430 - 466 -Bearing interest at 7.0% to 7.9% . . . . . 131 - 145 - 153 - 178 -

$ 753 $ - $ 830 $ - $ 979 $ - $1,072 $ -

Company

Floating rateEuro export credit facilities . . . . . . . . . . $1,271 $ - $1,284 $ - $1,121 $ - $1,090 $ -Euro bank loan . . . . . . . . . . . . . . . . . . . . . . - - - - 249 - 248 -Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . 150 - 149 - 150 - 149 -

$1,421 $ - $1,433 $ - $1,520 $ - $1,487 $ -

Fixed rateBearing interest at 3.0% to 3.9% . . . . . $ 160 $ - $ 176 $ - $ 221 $ - $ 239 $ -Bearing interest at 4.0% to 6.9% . . . . . 199 - 210 - 263 - 279 -Bearing interest at 7.0% to 7.9% . . . . . 131 - 145 - 153 - 178 -

$ 490 $ - $ 531 $ - $ 637 $ - $ 696 $ -

(a) Debt does not include the impact of interest rate swaps. The net difference between the fair value of our fixedrate debt and its carrying value was due to the market interest rates in existence at November 30, 2015 and2014 being lower than the fixed interest rates on these debt obligations, including the impact of any changesin our credit ratings. At November 30, 2015 and 2014, the net difference between the fair value of ourfloating rate debt and its carrying value was due to the market interest rates in existence at November 30,2015 being slightly lower (slightly higher at November 30, 2014), than the floating interest rates on thesedebt obligations, including the impact of any changes in our credit ratings. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active tobe Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated basedon appropriate market interest rates being applied to this debt.

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The summary of the maturity profiles of the financial liabilities at November 30, 2015 and 2014 was as follows(in millions):

Group

2015 2016 2017 2018 2019 2020There-after Total

Floating rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 188 $306 $156 $148 $139 $739 $1,676Fixed rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 143 161 103 63 159 862

Undiscounted cash flow obligations of debt, includingfuture interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 449 317 251 202 898 2,538

Amounts owed to Carnival Corporation group . . . . . . . . . 2,039 - - - - - 2,039Claims reserve (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 - - - - - 151Trade payables, accrued liabilities and other . . . . . . . . . . . 657 - - - - - 657Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 25 21 18 15 33 112

At November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,268 $474 $338 $269 $217 $931 $5,497

2014 2015 2016 2017 2018 2019There-after Total

Floating rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 406 $292 $142 $143 $131 $689 $1,803Fixed rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 261 156 183 114 261 1,149

Undiscounted cash flow obligations of debt, includingfuture interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580 553 298 326 245 950 2,952

Amounts owed to Carnival Corporation group . . . . . . . . . 1,513 - - - - - 1,513Claims reserve (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 - - - - - 178Trade payables, accrued liabilities and other . . . . . . . . . . . 730 - - - - - 730Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 93 26 23 22 38 202

At November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,001 $646 $324 $349 $267 $988 $5,575

(a) Primarily all of our claims reserve relate to crew, guest and other third-party claims from a January 2012 shipincident.

Company

2015 2016 2017 2018 2019 2020There-after Total

Floating rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146 $294 $145 $136 $127 $671 $1,519Fixed rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 105 125 67 29 28 548

Undiscounted cash flow obligations of debt, includingfuture interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 399 270 203 156 699 2,067

Amounts owed to Carnival Corporation group . . . . . . . . . 2,057 - - - - - 2,057Trade payables, accrued liabilities and other . . . . . . . . . . . 309 - - - - - 309Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 11 6 4 3 9 33

At November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,706 $410 $276 $207 $159 $708 $4,466

2014 2015 2016 2017 2018 2019There-after Total

Floating rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 378 $278 $128 $128 $116 $595 $1,623Fixed rate debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 215 111 140 73 66 732

Undiscounted cash flow obligations of debt, includingfuture interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505 493 239 268 189 661 2,355

Amounts owed to Carnival Corporation group . . . . . . . . . 1,328 - - - - - 1,328Trade payables, accrued liabilities and other . . . . . . . . . . . 291 - - - - - 291Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22 7 6 4 11 50

At November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,124 $515 $246 $274 $193 $672 $4,024

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Substantially all financial liabilities are held at amortised cost. The fair values of our financial liabilities notincluded in the table above approximate their book values.

As noted below the Group’s liquidity is considered on a consolidated Carnival Corporation & plc basis. Includedin the “Future Commitments and Funding Sources” section within the Business Review section of the StrategicReport is a schedule of the maturity profiles of the recorded and unrecorded contractual cash obligations ofCarnival Corporation & plc at November 30, 2015.

Financial Instruments that are Measured at Fair Value on a Recurring Basis

The estimated fair value and basis of valuation of our financial instrument assets and (liabilities) that aremeasured at fair value on a recurring basis were as follows (in millions):

Group

November 30, 2015 November 30, 2014Level 1 Level 2 Level 1 Level 2

AssetsCash equivalents (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 685 $ - $ 88 $ -Marketable securities held in trust (b) . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $ - $ 1 $ -Derivatives

Net investment hedges (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 14 $ - $ 12LiabilitiesDerivatives

Interest rate swaps (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ (24) $ - $ (28)Foreign currency zero cost collars (e) . . . . . . . . . . . . . . . . . . . . . . $ - $ - $ - $ (1)

Company

AssetsCash equivalents (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 669 $ - $ 64 $ -Derivatives

Net investment hedges (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 14 $ - $ 12LiabilitiesDerivatives

Interest rate swaps (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ (24) $ - $ (28)Foreign currency zero cost collars (e) . . . . . . . . . . . . . . . . . . . . . . . $ - $ - $ - $ (1)

(a) Cash equivalents are comprised of money market funds.(b) At November 30, 2015 and 2014, marketable securities held in trusts were comprised of Level 1 bonds,

frequently-priced mutual funds invested in common stocks and money market funds.(c) At November 30, 2015, we had foreign currency forwards totalling $44 million ($403 million at November 30,

2014) that are designated as hedges of our net investments in foreign operations, which have a euro- denominatedfunctional currency. At November 30, 2015, these foreign currency forwards settle through July 2017.

(d) At November 30, 2015 and 2014, we had euro interest rate swaps designated as cash flow hedges whereby wereceive floating interest rate payments in exchange for making fixed interest rate payments. At November 30,2015, these interest rate swap agreements effectively changed $418 million ($546 million at November 30,2014) of EURIBOR-based floating rate euro debt to fixed rate euro debt. These interest rate swaps settlethrough March 2025.

(e) At November 30, 2014, we had foreign currency derivatives consisting of foreign currency zero cost collarsthat are designated as foreign currency cash flow hedges for a portion of our euro-denominated ship buildingpayments totalling $550 million.

We measure our derivatives using valuations that are calibrated to the initial trade prices. Subsequent valuationsare based on observable inputs and other variables included in the valuation model such as interest rate and yieldprice curves, forward currency exchange rates, credit spreads, maturity dates, volatilities and nettingarrangements. We use the income approach to value derivatives for foreign currency options and forwards andinterest rate swaps using observable market data for all significant inputs and standard valuation techniques toconvert future amounts to a single present value amount, assuming that participants are motivated, but not

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compelled to transact. We also corroborate our fair value estimates using valuations provided by ourcounterparties.

Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of ourderivative assets and liabilities within counterparties. The amounts recognised within assets and liabilities wereas follows (in millions):

November 30, 2015

GrossAmounts

GrossAmounts

Offset in theBalance Sheet

Total NetAmounts

Presented inthe Balance

Sheet

GrossAmounts notOffset in the

Balance Sheet Net Amounts

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14 $ - $14 $ - $ 14Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24 $ - $24 $ - $ 24

November 30, 2014

GrossAmounts

GrossAmounts

Offset in theBalance Sheet

Total NetAmounts

Presented inthe Balance

Sheet

GrossAmounts notOffset in the

Balance Sheet Net Amounts

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14 $(2) $12 $ - $ 12Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31 $(2) $29 $ - $ 29

Capital Management

Within the DLC arrangement, the consolidated Carnival Corporation & plc group’s primary financial goals are toprofitably grow its cruise business and increase its ROIC, reaching double digit returns in the next two to threeyears, while maintaining a strong balance sheet. Their ability to generate significant operating cash flows allowsCarnival Corporation & plc to internally fund its capital investments. Carnival Corporation & plc’s goal is toreturn excess adjusted free cash flows to its shareholders in the form of additional dividends and/or sharebuybacks. In addition, Carnival Corporation & plc is committed to maintaining its strong investment grade creditratings, which are among the highest in the leisure travel industry. Other objectives of its capital structure policyare to maintain a sufficient level of liquidity with its available cash and cash equivalents and committedfinancings for immediate and future liquidity needs, and a reasonable debt maturity profile that is spread out overa number of years. The Group manages its capital on a consolidated Carnival Corporation & plc basis, applyingU.S. GAAP. For additional information see the “Liquidity, Financial Condition and Capital Resources” sectionwithin the Business Review section of the Strategic Report.

The net debt to capital ratio of the Group at November 30, 2015 and 2014 was calculated as follows (in millions):

2015 2014

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,320 $ 2,662Less cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (821) (217)

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,499 2,445Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,244 8,754

Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,743 $ 11,199

Net debt to capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4% 21.8%

At November 30, 2015, the net debt to capital ratio for the consolidated Carnival Corporation & plc group,applying U.S. GAAP and prepared on the same basis as above, was 23.7% (26.5% at November 30, 2014).Substantially all of our Group and Company debt agreements, including our Facility, contain one or morefinancial covenants that require us, among other things, to maintain minimum debt service coverage andminimum shareholders’ equity and to limit our debt to capital and debt to equity ratios and the amounts of oursecured assets and secured and other indebtedness. Generally, if an event of default under any debt agreementoccurs, including those held by Carnival Corporation, then pursuant to cross default acceleration clauses,substantially all of our outstanding debt and derivative contract payables could become due, and all debt and

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derivative contracts could be terminated. At November 30, 2015, we believe we were in compliance with all ofour debt covenants.

Liquidity Risk

Within the DLC arrangement, liquidity and liquidity risk is assessed on a consolidated Carnival Corporation & plcbasis and there are cross guarantees between the two parent companies that result in there being little substantivedifference in the availability of debt financing for either Carnival Corporation or Carnival plc. Typically, theCarnival Corporation & plc debt financing agreements allow for either Carnival Corporation or Carnival plc to drawunder the facilities, with the non-borrowing parent as guarantor. For additional information see the “Liquidity,Financial Condition and Capital Resources” section within the Business Review section of the Strategic Report.

As noted in the “Future Commitments and Funding Sources” section within the Business Review section of theStrategic Report, at November 30, 2015 the consolidated Carnival Corporation & plc group had liquidity of $10.4billion. Carnival Corporation & plc’s liquidity consisted of $1.2 billion of cash and cash equivalents, whichexcludes $226 million of cash used for current operations, $2.8 billion available for borrowing under theirrevolving credit facilities, and $6.5 billion under their committed future financings, which are comprised of shipexport credit facilities.

Interest Rate Risk

Within the DLC arrangement, consolidated Carnival Corporation & plc manages its exposure to fluctuations ininterest rates through its debt portfolio management and investment strategies. They evaluate their debt portfolioto determine whether to make periodic adjustments to the mix of fixed and floating rate debt through the use ofinterest rate swaps and the issuance of new debt or the early retirement of existing debt.

The interest rate profiles of the book value of financial assets and (liabilities) at November 30, 2015 were asfollows (in millions):

Group

2016 2017 2018 2019 2020There-after Total

Floating rateCash and cash equivalents . . . . . . . . . . . . . . . . . . . $ 821 $ - $ - $ - $ - $ - $ 821Euro export credit facilities . . . . . . . . . . . . . . . . . . (148) (146) (146) (138) (126) (683) (1,387)Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (150) - - - - (150)Short-term euro bank loans . . . . . . . . . . . . . . . . . . (30) - - - - - (30)

$ 643 $ (296) $ (146) $ (138) $ (126) $ (683) $ (746)

Fixed rateBearing interest at 3.0% to 3.9% . . . . . . . . . . . . . $ (45) $ (40) $ (40) $ (40) $ (40) $ (90) $ (295)Bearing interest at 4.0% to 5.9% . . . . . . . . . . . . . (81) (77) (50) (50) (14) (55) (327)Bearing interest at 6.0% to 7.9% . . . . . . . . . . . . . (80) - (51) - - - (131)

$ (206) $ (117) $ (141) $ (90) $ (54) $ (145) $ (753)

Company

Floating rateCash and cash equivalents . . . . . . . . . . . . . . . . . . . $ 731 $ - $ - $ - $ - $ - $ 731Euro export credit facilities . . . . . . . . . . . . . . . . . . (137) (136) (137) (126) (116) (619) (1,271)Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (150) - - - - (150)

$ 594 $ (286) $ (137) $ (126) $ (116) $ (619) $ (690)

Fixed rateBearing interest at 3.0% to 3.9% . . . . . . . . . . . . . $ (30) $ (27) $ (25) $ (26) $ (27) $ (25) $ (160)Bearing interest at 4.0% to 5.9% . . . . . . . . . . . . . (66) (63) (35) (35) - - (199)Bearing interest at 6.0% to 7.9% . . . . . . . . . . . . . (80) - (51) - - - (131)

$ (176) $ (90) $ (111) $ (61) $ (27) $ (25) $ (490)

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The interest rate profiles of financial assets and (liabilities) at November 30, 2014 were as follows (in millions):

Group

2015 2016 2017 2018 2019There-after Total

Floating rateCash and cash equivalents . . . . . . . . . . . . . . . . . $ 217 $ - $ - $ - $ - $ - $ 217Euro export credit facilities . . . . . . . . . . . . . . . (132) (130) (130) (130) (118) (630) (1,270)Euro bank loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . (249) - - - - - (249)Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (150) - - - - (150)Short-term euro bank loans . . . . . . . . . . . . . . . . (14) - - - - - (14)

$ (178) $ (280) $ (130) $ (130) $ (118) $ (630) $ (1,466)

Fixed rateBearing interest at 3.0% to 3.9% . . . . . . . . . . $ (52) $ (48) $ (48) $ (48) $ (48) $ (152) $ (396)Bearing interest at 4.0% to 5.9% . . . . . . . . . . (83) (80) (80) (52) (52) (83) (430)Bearing interest at 6.0% to 7.9% . . . . . . . . . . (2) (92) - (59) - - (153)

$ (137) $ (220) $ (128) $ (159) $ (100) $ (235) $ (979)

Company

Floating rateCash and cash equivalents . . . . . . . . . . . . . . . . . $ 107 $ - $ - $ - $ - $ - $ 107Euro export credit facilities . . . . . . . . . . . . . . . (119) (117) (117) (117) (106) (545) (1,121)Euro bank loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . (249) - - - - - (249)Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (150) - - - - (150)

$ (261) $ (267) $ (117) $ (117) $ (106) $ (545) $ (1,413)

Fixed rateBearing interest at 3.0% to 3.9% . . . . . . . . . . $ (34) $ (31) $ (31) $ (31) $ (31) $ (63) $ (221)Bearing interest at 4.0% to 5.9% . . . . . . . . . . (66) (63) (63) (36) (35) - (263)Bearing interest at 6.0% to 7.9% . . . . . . . . . . (2) (92) - (59) - - (153)

$ (102) $ (186) $ (94) $ (126) $ (66) $ (63) $ (637)

Carnival Corporation & plc has fixed and floating rate debt and uses interest rate swaps to manage its interestrate exposure in order to achieve a desired proportion of fixed and floating rate debt. Based upon a 10%hypothetical change in the November 30, 2015 market interest rates, their annual interest expense on floating ratedebt would change by an insignificant amount. Substantially all of Carnival Corporation & plc’s fixed rate debtcan only be called or prepaid by incurring costs, therefore, it is unlikely they will be able to take significant stepsin the short-term to mitigate their fixed rate debt exposure in the event of a significant decrease in market interestrates. For additional information see the Business Review section of the Strategic Report and Note 11 of the DLCFinancial Statements, which are included in Annex 1, but do not form part of these Carnival plc financialstatements.

Foreign Currency Exchange Rate Risks

We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating andfinancing activities, including netting certain exposures to take advantage of any natural offsets and, whenconsidered appropriate, through the use of derivative and nonderivative financial instruments, such as foreigncurrency forwards, options and swaps, foreign currency debt obligations and foreign currency cash balances. Ourprimary focus is to manage the economic foreign currency exchange risks faced by our operations, which are theultimate foreign currency exchange risks that would be realised by us if we exchanged one currency for another,and not accounting risks. While we will continue to monitor our exposure to these economic risks, we do notcurrently hedge our foreign currency exchange risks with derivative or nonderivative financial instruments, withthe exception of certain of our ship commitments and net investments in foreign operations. The financialimpacts of the hedging instruments we do employ generally offset the changes in the underlying exposures beinghedged.

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Operational Currency Risk

Our European and Australian cruise brands generate significant revenues and incur significant expenses in theireuro, sterling or Australian dollar functional currency, which subjects us to “foreign currency translational” riskrelated to these currencies. Accordingly, exchange rate fluctuations of the euro, sterling and Australian dollaragainst the U.S. dollar will affect our reported financial results since the reporting currency for our consolidatedfinancial statements is the U.S. dollar. Any strengthening of the U.S. dollar against these foreign currencies hasthe financial statement effect of decreasing the U.S. dollar values reported for these cruise brands’ revenues andexpenses. Any weakening of the U.S. dollar has the opposite effect.

Substantially all of our brands also have non-functional currency risk related to their international salesoperations, which has become an increasingly larger part of most of their businesses over time, and principallyincludes the euro, sterling and Australian, Canadian and U.S. dollars. In addition, all of our brands have non-functional currency expenses for a portion of their operating expenses. Accordingly, we also have “foreigncurrency transactional” risks related to changes in the exchange rates for our brands’ revenues and expenses thatare in a currency other than their functional currency. However, these brands’ revenues and expenses in non-functional currencies create some degree of natural offset from these currency exchange movements.

Based on a 10% hypothetical change in all currency exchange rates that were used in Carnival Corporation &plc’s December 18, 2015 guidance, Carnival Corporation & plc estimate (including both the foreign currencytranslational and transactional impacts) its adjusted diluted earnings guidance would change by $0.30 per shareon an annualized basis for 2016. For additional information see the Business Review section of the StrategicReport and Note 11 of the DLC Financial Statements, which are included in Annex 1, but do not form part ofthese Carnival plc financial statements.

Investment Currency Risk

At November 30, 2015, substantially all of the Group net operating assets were denominated in euros, sterlingand Australian dollars. As a result of this currency composition, the Group’s U.S. dollar consolidated balancesheet can be affected by currency movements. The Group partially mitigates the effect of such movements byentering into foreign currency forwards and having some borrowings in the same currencies as those in which theassets are denominated.

The exchange rates for each of our major currencies as of and for the year ended November 30, 2015 and 2014were as follows:

2015 2014£:U.S.$ euro:U.S.$ Aus:U.S.$ £:U.S.$ euro:U.S.$ Aus:U.S.$

November 30 exchange rates . . . . . . . . . . 1.50 1.06 0.72 1.56 1.25 0.85Average yearly exchange rates . . . . . . . . 1.54 1.12 0.76 1.65 1.34 0.91

At November 30, the fair value of derivatives included in the Group and Company balance sheets atNovember 30, 2015 and 2014 were as follows (in millions):

2015 2014Notional Assets Liabilities Notional Assets Liabilities

Foreign currency forwards- net investmenthedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44 $ 14 $ - $ 403 $ 12 $ -

Debt related interest rate swaps-cash flowhedge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 418 - 24 $ 546 - 28

Foreign currency zero cost collars-ships . . . . . $ - - - $ 550 - 1

$ 14 $ 24 $ 12 $ 29

At November 30, 2015, the Group and Company have $44 million of foreign currency forwards that aredesignated as hedges of our net investments in foreign operations, which have a euro-denominated functionalcurrency, thus partially offsetting this foreign currency exchange rate risk. Based on a 10% hypothetical changein the U.S. dollar to euro exchange rate as of November 30, 2015 we estimate that these foreign currencyforwards’ fair values would change by $4 million, which would be offset by a corresponding change of

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$4 million in the U.S. dollar value of our net investments. In addition, based on a 10% hypothetical change in theU.S. dollar to euro, sterling and Australian dollar exchange rates at November 30, 2015, which are the functionalcurrencies we translate into our U.S. dollar reporting currency, we estimate our 2015 cumulative translationadjustment would have changed by $366 million.

There are no amounts excluded from the assessment of hedge effectiveness, and there are no credit risk relatedcontingent features in our derivative agreements. The amount of estimated cash flow hedges’ unrealised gainsand losses that are expected to be reclassified to earnings in the next twelve months is not significant.Ineffectiveness arising on cash flow hedges was not material during 2015 and 2014 and, accordingly, all cashflow hedges were considered effective.

Newbuild Currency Risk

Our shipbuilding contracts are typically denominated in euros. Our decisions regarding whether or not to hedge anon-functional currency ship commitment for our cruise brands are made on a case-by-case basis, taking intoconsideration the amount and duration of the exposure, market volatility, economic trends, our overall expectednet cash flows by currency and other offsetting risks. We use foreign currency derivative contracts and have usednonderivative financial instruments to manage foreign currency exchange rates risk for some of our shipconstruction payments.

In February 2015, we settled our foreign currency zero cost collars that were designated as cash flow hedges forthe final euro-denominated shipyard payments of P&O Cruises (UK)’s Britannia, which resulted in $33 millionbeing recognised in other comprehensive loss during 2015.

At February 19, 2016, our remaining newbuild currency exchange rate risk relates to euro-denominated newbuildcontract payments, which represent a total unhedged commitment of $0.7 billion.

The cost of shipbuilding orders that we may place in the future that is denominated in a different currency thanour cruise brands’ or the shipyards’ functional currency is expected to be affected by foreign currency exchangerate fluctuations. These foreign currency exchange rate fluctuations may affect our desire to order new cruiseships. Additional detail relating to the Group’s and Company’s financial risk management objectives and policiesis included in Note 1, the Business Review section of the Strategic Report and Note 11 of the DLC FinancialStatements, which are included in Annex 1, but do not form part of these Carnival plc financial statements.

Credit Risk

As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial andother institutions with which we conduct significant business. Our maximum exposure under foreign currencycontracts and interest rate swap agreements that are in-the-money, which were not material at November 30,2015, is the replacement cost, or contractually allowed offset, in the event of nonperformance by thecounterparties to the contracts, all of which are currently our lending banks. We seek to minimise these creditrisk exposures, including counterparty nonperformance primarily associated with our cash equivalents,investments, committed financing facilities, derivative instruments, insurance contracts and new ship progresspayment guarantees, by normally conducting business with large, well-established financial institutions,insurance companies and export credit agencies, and by diversifying our counterparties. In addition, we haveguidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity andminimise risk. We normally do require collateral and/or guarantees to support notes receivable on significantasset sales, long-term ship charters and new ship progress payments to shipyards. We currently believe the risk ofnonperformance by any of these significant counterparties is remote.

We also monitor the creditworthiness of travel agencies and tour operators in Asia, Australia and Europe andcredit and debit card providers to which we extend credit in the normal course of our business, which includescharter-hire agreements in Asia prior to sailing. Our credit exposure also includes contingent obligations relatedto cash payments received directly by travel agents and tour operators for cash collected by them on cruise salesin Australia and most of Europe where we are obligated to honour our guests’ cruise payments made by them totheir travel agents and tour operators regardless of whether we have received these payments. Concentrations ofcredit risk associated with these trade receivables, charter-hire agreements and contingent obligations are notconsidered to be material, principally due to the large number of unrelated accounts within our customer base,the nature of these contingent obligations and their short maturities. We have experienced only minimal creditlosses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally requirecollateral or other security to support normal credit sales.

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Independent auditors’ report to the members of Carnival plc

Report on the financial statements

Our opinionIn our opinion, Carnival plc’s Group financial statements and Company financial statements (the “financialstatements”):

• give a true and fair view of the state of the Group’s and Company’s affairs as at 30 November 2015 and ofthe Group’s and the Company’s profit and cash flows for the year then ended; and

• the Group financial statements have been properly prepared in accordance with International FinancialReporting Standards (“IFRSs”) as adopted by the European Union; and

• the Company financial statements have been properly prepared in accordance with International FinancialReporting Standards (“IFRSs”) as adopted by the European Union and as applied in accordance with theprovisions of the Companies Act 2006; and

• have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of theIAS Regulation.

What we have audited

Carnival plc’s financial statements, included within the Annual Report, comprise:• the Group and Company balance sheets as at 30 November 2015;• the Group statement of income and statement of comprehensive income for the year then ended;• the Group and Company statements of cash flow for the year then ended;• the Group and Company statements of changes in shareholders’ equity for the year then ended; and• the notes to the financial statements, which include a summary of significant accounting policies and other

explanatory information.

Certain required disclosures have been presented elsewhere in the Carnival plc Annual Report Documents (the“Annual Report”), rather than in the notes to the financial statements. These are cross-referenced from thefinancial statements and are identified as audited.

The financial reporting framework that has been applied in the preparation of the financial statements isapplicable law and IFRSs as adopted by the European Union and, as regards the Company financial statements,as applied in accordance with the provisions of the Companies Act 2006.

The Carnival Corporation consolidated financial statements for 2015, prepared under U.S. Generally AcceptedAccounting Principles (referred to as either “The Carnival Corporation & plc Annual Report” or the “DLCFinancial Statements”), which are included in Annex I of the Carnival plc Strategic Report and IFRS FinancialStatements, as other information, do not form part of the Carnival plc IFRS Financial Statements and, as such,are not within the scope of this opinion.

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Our audit approachOverview

Materiality

Audit scope

Area of focus

• Overall Group materiality: $45 million, which represents approximately 5% of netincome before income taxes, adjusted for goodwill impairment charges, to theextent that they are significant.

• Carnival plc has seven operating units which fall into three reporting segments.Three operating units were subject to an audit of their complete financialinformation due to their size.

The areas of audit focus were:• Risks of fraud in relation to revenue recognition.• Impairment reviews of AIDA Cruises (“AIDA”), Costa Cruises (“Costa”) and

Cunard goodwill and the carrying value of certain Costa, P&O Cruises (UK)(“P&O (UK)”)) and P&O Cruises (Australia) (“P&O (Australia)”) ships.

• Costa Concordia incident (the “2012 ship incident”).

The scope of our audit and our areas of focusWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK &Ireland)”).

We designed our audit by determining materiality and assessing the risks of material misstatement in thefinancial statements. In particular, we looked at where the Directors made subjective judgements, for example inrespect of significant accounting estimates that involved making assumptions and considering future events thatare inherently uncertain. As in all of our audits we also addressed the risk of management override of internalcontrols, including evaluating whether there was evidence of bias by the Directors that represented a risk ofmaterial misstatement due to fraud.

The risks of material misstatement that had the greatest effect on our audit, including the allocation of ourresources and effort, are identified as “areas of focus” in the table below. We have also set out how we tailoredour audit to address these specific areas in order to provide an opinion on the financial statements as a whole, andany comments we make on the results of our procedures should be read in this context. This is not a complete listof all risks identified by our audit.

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Area of focus How our audit addressed the area of focusRisks of fraud in relation to revenue recognitionWe focused on the timing of revenue recognition in the finalmonths of the accounting year to check that revenue was recordedin the correct period particularly for cruises that straddle theyearend and for revenue that has been received in advance of thecruise departure, which is deferred until the voyage has takenplace.

We examined the appropriateness of the Group’s accountingpolicy surrounding revenue recognition and its compliancewith IFRSs as adopted by the EU, and tested the application ofthis policy, with particular emphasis on the risks identifiedopposite.Where appropriate we evaluated the integrity of the relevantcomputer systems, such as through performing user access andprogramme change control testing. We also tested theoperating effectiveness of the internal controls over therecording of revenue against a specific voyage in the periodand we checked the Group’s cut off straddle adjustment forvoyages where the duration spanned the yearend by comparingthe Director’s estimate to data such as voyage departure dates,duration, and voyage revenue and cost records.During the year we performed three ship visits to undertakewalkthroughs of some of the onboard revenue processes to gainan understanding of those processes, such as in-house shop, barrevenue, cash counts, casino revenue and shore excursionrevenue, as well as boarding checks, credit card checks andonboard account set up. The focus is mainly on obtaining/updating our understanding of procedures performed onboard.At the yearend we tested the revenue received in advance of thecruise taking place with reference to cruise voyage schedules anda sample of bookings to determine the appropriateness of relatedcustomer deposits, which have been deferred.We also tested journal entries posted to revenue accounts toidentify any unusual or irregular items, and the reconciliationsbetween the revenue systems used by the Group and its financialledgers.Based on our testing we did not identify any materialmisstatements.

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Area of focus How our audit addressed the area of focusImpairment reviews of AIDA, Costa and Cunard goodwill and thecarrying value of certain Costa, P&O (UK) and P&O (Australia)shipsThe Group holds significant amounts of goodwill and property andequipment in the form of ships on the balance sheet related to itscruise brands (“brands”), as detailed in Notes 10 and 11 to thefinancial statements. The risk is that these balances are overstatedand need to be impaired.In assessing the carrying value of goodwill and certain ships, theDirectors are required to make judgements about the futureperformance of these brands and ships, including whether theships will remain in use or be sold.We focussed on the valuation of AIDA, Costa and Cunard, whichhad goodwill carrying values of $122 million, $301 million and$165 million, respectively, as the Europe cruise region hascontinued to experience economic pressures, which could impactthe headroom previously assessed.AIDA’s, Costa’s and Cunard’s goodwill valuations are dependenton maintaining or improving net revenue yield’s and operationalimprovements. As such we focussed on the assumptions theDirectors made about the growth rates in these areas.No goodwill impairment charge was taken as a result of theDirectors’ review.The economic conditions in the Italian, UK and Australian regionsled the Directors to evaluate the carrying value of certain Costa,P&O (UK) and P&O (Australia) ships.The ship valuations are either dependent on continuing netrevenue yield growth and operational improvements, where theship is expected to remain in use, or for those that are chartered orexpected to be disposed of the valuation is dependent on expectedoperational cash flows or sale proceeds, respectively. As such wefocussed on the assumptions the Directors made about the growthrates in these areas, the expected ability of the charterer/purchaserto pay amounts due and the expected sale proceeds consideringrecent ship sales in assessing the carrying value of vessels.Net impairment releases of $22 million have been taken as a resultof the Directors’ review.

We evaluated the Directors’ future cash flow forecasts, theassumptions used and the process by which they were prepared,for AIDA, Costa and Cunard and for those ships that experiencedan event that would potentially trigger an impairment review inthe current year, including comparing the forecasts to the latestBoard approved strategic plans. We evaluated the reasonablenessof the Directors’ forecasts, by assessing their historical forecastingaccuracy. We also evaluated:Š the Directors’ key assumptions for changes to net

revenue yield, net cruise costs (including fuel prices),new ship additions and remaining useful life of the ships,by comparing them to current revenue booking and costtrends, as well as historical results and economic andexternal industry data;

Š the long-term growth rates in the forecasts, by comparingthem to external industry forecasts;

Š the discount rate applied to the goodwill assessments byassessing the cost of capital for the Group; and

Š the discount rate applied to the ship assessments byassessing the cost of capital of the brand and thecountry.

We found the assumptions to be consistent with our expectations,as a result of performing a sensitivity stress test analysis on eachof the key assumptions, particularly considering the expectedgrowth in net revenue yields across their key markets, changes tocruise costs, including the impact of fuel consumption and pricechanges, new ship additions, long-term growth rate, the discountrate and the remaining life of the ships and how the actual resultscompared to previous forecasts. For Costa and Cunard weconsider that lower than expected growth in the net revenueyields, adverse economic conditions or an inability to achieve theplanned results could reasonably be expected to give rise to animpairment charge in the future. This is consistent with theDirector’s assessment as detailed in Note 11.We also considered recent ship sales compared to the carryingvalue of the vessels, the ability of third parties to pay amountsdue and the likelihood of the Director’s being able to redeployships into other markets, should the need arise, where carryingvalues could be recovered and took into account instanceswhere this had occurred in the past.Based on our testing we did not identify any materialmisstatements.

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Area of focus How our audit addressed the area of focusThe 2012 ship incidentThe Group holds a significant provision of $132 million and alargely offsetting insurance recoverable on the balance sheet inrelation to this 2012 ship incident (Notes 12 and 15). The risk isthat these balances are not correctly stated.The Directors have had to continue to make judgements about theexposure to environmental site restoration and legal claims as wellas the amounts recoverable under insurance.We continued to focus on the completeness and accuracy of theprovision recognised at yearend as well as the valuation of thecarrying value of the insurance recoverable and the associatedpresentation in the financial statements.

We examined the terms of the environmental site restorationcontract and held independent discussions with the Group’sinsurance providers regarding the status of the insurance claimunder the contract.In evaluating the environmental site restoration costs and incidentrelated legal claims from guests and crew, we evaluated the viewsof both internal and external legal counsel of the Group. We alsoexamined the evidence available from the costs incurred to date.We evaluated the Group’s accounting for the insurance claim;the cash received to date and considered the collectability ofthe insurance recoverable. We also evaluated the Directors’assumptions relating to the remaining costs to be incurred,taking into account the expected future costs and reports of theengineers contracted by the Group and the insurance providers.Based on this we did not identify any material omissions fromthe provision and we found that there was evidence to supportthe Directors’ conclusion that it was appropriate to recognisethe insurance recoverable on the balance sheet on a gross basis.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on thefinancial statements as a whole, taking into account the geographic structure of the Group, the accountingprocesses and controls, and the industry in which the Group operates.

Carnival has seven operating units which fall into three reporting segments. Three operating units, AIDA, Costa andCarnival UK (Cunard and P&O (UK)) which contribute over 90% of net income before income taxes to the Groupresults were subject to an audit of their complete financial information, due to their size, by local component auditteams. We visited the AIDA and Carnival UK operating units to review the component teams’ work and we met localmanagement. As it relates to the Costa component team we met and reviewed their work via the use of videoconferences and Webex’s, having performed in person visits to this team in the prior two years. There have been nosignificant changes in the composition of our Costa component team since our visit in 2014. In addition specific auditprocedures were performed on certain balances and transactions in respect of other operating units, including thecarrying value of certain ships. This together with additional procedures performed at the Group level, includingauditing the consolidation, gave us the evidence we needed for our opinion on the financial statements as a whole.

MaterialityThe scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds formateriality. These, together with qualitative considerations, helped us to determine the scope of our audit and thenature, timing and extent of our audit procedures on the individual financial statement line items and disclosuresand in evaluating the effect of misstatements, both individually and on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall Group materiality $45 million (2014: $38 million).

How we determined it Approximately, 5% of net income before income taxes,adjusted for the goodwill impairment charges, to the extent thatthey are significant.

Rationale for benchmark applied We believe that net income before income taxes, adjusted forgoodwill impairment charges, to the extent that they are significant,is the primary measure used by shareholders and other users of thefinancial statements in assessing the performance of the Group, andthat by excluding items (such as goodwill impairment charges, tothe extent that they are significant), it provides a clearer view on theperformance of the underlying business.In the prior year we used an average of net income before incometaxes from continuing operations of the past four years approach,as it provided a consistent year-on-year basis for determiningmateriality by considering the impact of the 2012 ship incident onoverall continuing operations during this period and eliminatedthe disproportionate impact of this incident.

Component materiality For each component in our audit scope, we allocated amateriality that was less than our overall Group materiality.The range of materiality allocated across components wasbetween $33 million and $43 million.

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We agreed with the Audit Committee that we would report to them misstatements identified during our auditabove $2 million (2014: $2 million) as well as misstatements below that amount that, in our view, warrantedreporting for qualitative reasons.

Going concernUnder the Listing Rules we are required to review the Directors’ statement, set out on page 66 of the StrategicReport in relation to going concern. We have nothing to report having performed our review.

Under ISAs (UK & Ireland) we are required to report to you if we have anything material to add or to drawattention to in relation to the Directors’ statement about whether they considered it appropriate to adopt the goingconcern basis in preparing the financial statements. We have nothing material to add or to draw attention to.

As noted in the Directors’ statement, the Directors have concluded that it is appropriate to adopt the goingconcern basis in preparing the financial statements. The going concern basis presumes that the Group andCompany have adequate resources to remain in operation, and that the Directors intend them to do so, for at leastone year from the date the financial statements were signed. As part of our audit we have concluded that theDirectors’ use of the going concern basis is appropriate. However, because not all future events or conditions canbe predicted, these statements are not a guarantee as to the Group’s and Company’s ability to continue as a goingconcern.

Other required reporting

Consistency of other informationCompanies Act 2006 opinionIn our opinion, the information given in the Strategic Report, included within the Annual Report, and theCarnival plc Directors’ Report, set out in Annex A to the Proxy Statement, for the financial year for which thefinancial statements are prepared is consistent with the financial statements.

ISAs (UK & Ireland) reportingUnder ISAs (UK & Ireland) we are required to report to you if, in our opinion:

• information in the Annual Report is:- materially inconsistent with the information in the audited financial

statements; or- apparently materially incorrect based on, or materially inconsistent with, our

knowledge of the Group and Company acquired in the course of performingour audit; or

- otherwise misleading.

We have noexceptions to report.

• the statement given by the Directors on page A-9 in Annex A to the ProxyStatement, in accordance with provision C.1.1 of the UK Corporate GovernanceCode (the “Code”), that they consider the Annual Report taken as a whole to befair, balanced and understandable and provides the information necessary formembers to assess the Group’s and Company’s position and performance, businessmodel and strategy is materially inconsistent with our knowledge of the Group andCompany acquired in the course of performing our audit.

We have noexceptions to report.

• the section of the Annual Report on pages C-4 to C-5 and C-6 to C-9 in Annex C tothe Proxy Statement as required by provision C.3.8 of the Code, describing thework of the Audit Committee does not appropriately address matterscommunicated by us to the Audit Committee.

We have noexceptions to report.

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The Directors’ assessment of the prospects of the Group and of the principalrisks that would threaten the solvency or liquidity of the GroupUnder ISAs (UK & Ireland) we are required to report to you if we have anything material to add or to drawattention to in relation to:

• the Directors’ confirmation on page 54 of the Strategic Report, in accordance withprovision C.2.1 of the Code, that they have carried out a robust assessment of theprincipal risks facing the Group and Company, including those that wouldthreaten its business model, future performance, solvency or liquidity.

We have nothingmaterial to add or todraw attention to.

• the disclosures on pages 56 to 66 of the Strategic Report that describe those risksand explain how they are being managed or mitigated.

We have nothingmaterial to add or todraw attention to.

• the Directors’ explanation on pages 66 to 67 of the Strategic Report, inaccordance with provision C.2.2 of the Code, as to how they have assessed theprospects of the Group, over what period they have done so and why theyconsider that period to be appropriate, and their statement as to whether they havea reasonable expectation that the Group will be able to continue in operation andmeet its liabilities as they fall due over the period of their assessment, includingany related disclosures drawing attention to any necessary qualifications orassumptions.

We have nothingmaterial to add or todraw attention to.

Under the Listing Rules we are required to review the Directors’ statement on page 54of the Strategic Report that they have carried out a robust assessment of the principalrisks facing the Group and the Directors’ statement on pages 66 to 67 of the StrategicReport in relation to the longer-term viability of the Group. Our review wassubstantially less in scope than an audit and only consisted of making inquiries andconsidering the Directors’ process supporting their statements; checking that thestatements are in alignment with the relevant provisions of the Code; and consideringwhether the statements are consistent with the knowledge acquired by us in the courseof performing our audit.

We have nothingmaterial to add or todraw attention to.

Adequacy of accounting records and information and explanations receivedUnder the Companies Act 2006 we are required to report to you if, in our opinion:• we have not received all the information and explanations we require for our audit; or• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not

been received from branches not visited by us; or• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not

in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors’ remuneration

Directors’ Remuneration Report - Companies Act 2006 opinion

In our opinion, the part of the Directors’ Remuneration Report in Annex B to the Proxy Statement, datedFebruary 19, 2016, to be audited has been properly prepared in accordance with the Companies Act 2006.

Other Companies Act 2006 reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures ofDirectors’ remuneration specified by law are not made. We have no exceptions to report arising from thisresponsibility.

Corporate governance statementUnder the Listing Rules we are required to review the part of the Corporate Governance Statement relating to tenfurther provisions of the Code. We have nothing to report having performed our review.

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Responsibilities for the financial statements and the audit

Our responsibilities and those of the DirectorsAs explained more fully in the Statement of Directors’ Responsibilities set out on page A-9 in Annex A to theProxy Statement, the Directors are responsible for the preparation of the financial statements and for beingsatisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicablelaw and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s EthicalStandards for Auditors.

This report, including the opinions, has been prepared for and only for the Company’s members as a body inaccordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in givingthese opinions, accept or assume responsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involvesAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient togive reasonable assurance that the financial statements are free from material misstatement, whether caused byfraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the Group’s and the Company’s circumstances and havebeen consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the Directors; and• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence,forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we considernecessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing theeffectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify materialinconsistencies with the audited financial statements and to identify any information that is apparently materiallyincorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing theaudit. If we become aware of any apparent material misstatements or inconsistencies we consider theimplications for our report.

Nicholas Smith (Senior Statutory Auditor)for and on behalf of PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsLondon19 February 2016

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2015 ANNUAL REPORT

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CARNIVAL CORPORATION & PLC2015 ANNUAL REPORT

TABLE OF CONTENTS

COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1CHIEF EXECUTIVE OFFICER’S LETTER TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2SHAREHOLDER BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 7CONSOLIDATED BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8CONSOLIDATED STATEMENTS OF CASH FLOWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING . . . . . . . . . . 38REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM . . . . . . . . . . . . 39MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64MARKET PRICE FOR COMMON STOCK AND ORDINARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 66STOCK PERFORMANCE GRAPHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69CORPORATE AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

C O M P A N Y

Carnival Corporation & plc is the largest leisure travel company in the world, and among the most profitable andfinancially strong. We are also the largest cruise company having carried 47% of global cruise guests and aleading provider of vacations to all major cruise destinations throughout the world. We operate our cruise shipswithin a portfolio of ten leading global, regional and national cruise brands that sell tailored cruise products,services and vacation experiences in all the world’s most important vacation geographic areas. We believehaving global and regional brands that are serving multiple countries and national brands that are tailored toserve individual countries provides us with a unique advantage to compete within the entire travel and leisuremarket for consumers’ discretionary vacation spending. Our vision is to deliver unmatched joyful vacationexperiences and breakthrough total shareholder returns by exceeding guest expectations and achieving the fullbenefits inherent in our scale.

Our portfolio of cruise brands in North America, Europe, Australia and Asia are comprised of Carnival CruiseLine, Fathom, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&OCruises (Australia) and P&O Cruises (UK). Together, these brands operate 99 ships totaling 216,000 lowerberths with 17 cruise ships scheduled to be delivered between 2016 and 2020. Carnival Corporation & plc alsooperates Holland America Princess Alaska Tours, the leading tour company in Alaska and the Canadian Yukon,which complements our Alaska cruise operations. Traded on both the New York and London Stock Exchanges,Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100indices.

H I G H L I G H T S

2015 2014 2013 2012 2011

(in millions, except per share amounts and statistical data)

Revenues $ 15,714 $ 15,884 $ 15,456 $ 15,382 $ 15,793

Net Income (a) $ 1,757 $ 1,216 $ 1,055 $ 1,285 $ 1,912

Adjusted Net Income (a) (b) $ 2,106 $ 1,504 $ 1,209 $ 1,501 $ 1,939

Earnings Per Share - Diluted (a) $ 2.26 $ 1.56 $ 1.36 $ 1.65 $ 2.42

Adjusted Earnings Per Share - Diluted (a)(b) $ 2.70 $ 1.93 $ 1.55 $ 1.92 $ 2.46

Statistical Data

Passengers Carried (in thousands) 10,800 10,600 10,100 9,800 9,600

Passenger Capacity (c)(d) 216,000 212,000 208,000 203,000 196,000

Number of Ships (d) 99 100 101 100 99

(a) See “Note 1 – General” to the Consolidated Financial Statements.

(b) For a reconciliation to U.S. GAAP, see “Selected Financial Data.”

(c) Passenger capacity is calculated based on two passengers per cabin.

(d) As of November 30, except for 2011 which are as of January 23, 2012.

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CHIEF EXECUTIVE OFFICER’S LETTER TO SHAREHOLDERS

Dear Shareholders,

2015 was a very strong year for our company. We accelerated progress toward our goal of delivering a double-digit return on our investment with earnings that were over 40 percent higher than 2014 — and that was on top ofnearly 25 percent growth in 2013. We achieved over 4 percent higher revenue yields while our ongoing efforts toleverage our industry-leading scale helped to contain costs. Our adjusted earnings exceeded $2 billion (U.S.GAAP earnings of $1.8 billion). Record cash from operations topped $4 billion which was more than enough tofund our capital commitments and still return in excess of $1 billion to shareholders through a 20 percentincrease in the annual dividend and the ongoing repurchase of Carnival stock.

These strong results were a tribute to the outstanding efforts of our 120,000 shipboard and shoreside team memberswho create exceptional vacation experiences for nearly 11 million guests annually, along with the vital support ofour travel agent partners around the globe. Their combined efforts enabled us to overcome a variety of obstacles in2015 and to exceed the high-end of the full-year guidance we provided at the beginning of the year. These obstaclesincluded macroeconomic and geopolitical challenges, and the usual weather and other one-off events as well as a$0.10 per share drag from fuel prices and currency fluctuations compared to our earlier guidance.

We enjoyed strong performance on both sides of the Atlantic, particularly in North America. In fact, some of ourbrands have reached the double-digit return threshold already, including our flagship brand Carnival Cruise Line.We are very proud of the Carnival Cruise Line team, which has worked so hard and so effectively to acceleratethe brand’s return to double-digits.

THE PATH TO DOUBLE-DIGIT RETURNS

Looking ahead, we are working hard to deliver double-digit return on our investment across the entirecorporation through our ongoing efforts to drive demand in excess of measured capacity growth and to capturethe inherent value of our industry-leading scale.

Measured Capacity Growth

We remain focused on maintaining measured capacity growth by delivering innovative, more efficient ships,while at the same time removing less efficient vessels from our fleet.

During the year, progress continued on our fleet-enhancement program as we finalized agreements for eight newcruise ships for delivery between 2018 and 2020 as part of our strategic partnership with Fincantieri in Italy andMeyer Werft in Germany and Finland.

These new ships will be among the most efficient we have ever built and will significantly enhance the returnprofile of our entire fleet. Several of these next-generation ships will pioneer a new era in the use of sustainablefuels through our “green cruising” design represented by the first cruise ships to be powered at sea and in port byliquefied natural gas, considered the world’s cleanest burning fossil fuel. These ships will also introduce a host ofinnovative guest experiences that we will announce in the coming months.

We are especially excited about our new ship deliveries in 2016, including AIDAprima, Carnival Vista, HollandAmerica Koningsdam and Seabourn Encore. Among the innovative features designed to further complement theguest experience unique to each brand, these new additions bring to the fleet an outdoor ice rink, a lazy river ride,the first ship-top open-air cycling skyride, the first IMAX theatre at sea and Blend, the first purpose-builtpersonalized shipboard wine-blending venue. We expect each ship delivery to help drive demand well in excessof our planned capacity growth.

Even with these four new ships, our capacity growth in North America and Europe will be less than 2 percent in2016. As anticipated, our overall 3.5 percent capacity growth will again be weighted toward Asia Pacific as wetransfer capacity to meet increasing demand in that region.

Accelerating Demand

I am very proud of our teams’ many accomplishments last year. Those efforts included our multi-faceted campaignbuilt around the 2015 Super Bowl, which generated more than 10 billion positive media impressions during theheight of wave season; P&O Cruises’ delivery of Britannia, the largest ship ever built specifically for British guestsand named by Her Majesty the Queen; Princess Cruises’ 50th anniversary celebration, which reunited the originalcast of “The Love Boat” television series, and featured an award-winning float in the Rose Parade; Cunard’s 175th

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anniversary salute to Liverpool where the three Queens — Elizabeth, Victoria and Queen Mary 2 — captivated1.3 million onlookers in what may have been the largest attendance at a single day maritime event in history; and,most recently, our historic five-ship event in Sydney Harbor for P&O Cruises (Australia).

These well-crafted opportunities showcase our brands, increase consumer awareness and bolster considerationfor a cruise vacation. In fact, our positive media impressions are up three-fold in just two years.

In 2015, we made significant progress on many other initiatives designed to achieve consistent revenue yieldimprovement by creating demand that surpasses supply.

Of course, the best way to increase demand is to continue to exceed guest expectations. One way to accomplishthat is to bring the best specialty restaurants and celebrity chef-designed menus to sea. Our growing list ofrenowned chefs includes Thomas Keller, Australian chef Curtis Stone and chocolatier Norman Love, joiningMarco Pierre White, Guy Fieri and David Burke, among others.

We continue to enhance our entertainment offerings across our brands with the addition of B.B. King’s BluesClub, the live interactive music experience Billboard Onboard, The Voice of the Ocean, Lincoln Center Stageand new productions by Stephen Schwartz, award-winning composer of “Wicked,” along with a host oftechnological and programming innovations.

The diversity of great entertainers aboard our ships keeps growing with headliners like country music superstarCarrie Underwood, folk legends Crosby, Stills and Nash; jazz star Herbie Hancock; and even the Grinch, throughCarnival Cruise Line’s Seuss at Sea program. And, to give consumers yet another reason to take a cruise, we willhost our first Fashion Week at sea in 2016.

These, along with fresh retail and gaming options, are all designed to offer guests even more of what they wantand in turn drive higher onboard revenue.

Our focus is on consistently exceeding guest expectations and creating lifelong advocates. Customer feedbackindicates that we are continuing to deliver on our guest experience, and the intent to repeat is very strong acrossour brands.

New Market Opportunities

We reinforced our leadership position in the burgeoning China cruise region with the successful introduction of afourth ship in 2015. We are well positioned in 2016 with two more year-round ships — one each for the CostaCruises and Princess Cruises brands.

We expect to bolster our growth in China for years to come. Beyond 2016, Princess Cruises’Majestic Princess,the first ship built specifically for Chinese guests and designed to stimulate consumer demand, will enter Chinaalong with both our Carnival Cruise Line and AIDA brands. Entering China with multiple brands enables us togrow our presence faster and achieve deeper penetration by providing cruise experiences aimed at differentiatedsegments. In addition, we recently signed a joint venture with the China State Shipbuilding Corporation and theChina Investment Corporation to further our growth in this region.

We are well positioned to capitalize on the growing demand for international travel among Chinese consumersfollowing the recent easing of travel restrictions coupled with a growing upper middle class. Chinese outboundtravelers, already estimated at 135 million strong, are expected to grow to 200 million by 2020. Over time we areconfident that China will rank among the largest source regions for cruises.

While today China represents just 5 percent of our global capacity, we expect it to continue to be an expansivegrowth region for us. By shifting capacity growth from North America and Europe to the fast growing Chinaregion, we are further fostering combined revenue yield growth.

Working Together to Unlock our Potential

Our team is totally engaged in capturing the full benefit of the latent opportunity inherent in our industry-leadingscale — in both driving revenues and containing costs.

The more than 5 percent onboard revenue growth achieved in 2015 is an affirmation of the inherent power ofharnessing our collective efforts as we embrace a fundamental behavioral change through communicating,collaborating and coordinating across our 10 world-leading brands.

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Improved coordination among our brands has also contributed to revenue yield improvements, and we havecompleted the design phase of a common revenue management system across a number of our brands.

Significant progress was also made delivering cost savings in 2015 in a variety of procurement areas includingair travel, food and hotel supplies. We have identified additional opportunities to leverage our scale to reducecosts while enhancing the guest experience in 2016 and beyond. These efforts will deliver a cumulative total costsavings of $170 million since we began the conversation just over two years ago and will continue to be rolledout over time and help to offset inflation.

Sustainable Operations

Our reputation and success depend on having sustainable and transparent operations. We continually strive toensure cruising is the most enjoyable vacation experience for our guests. We fulfill this commitment by keepingguests and crew members safe, protecting the environment, developing our workforce, strengthening ourstakeholder relations, enhancing the port communities our ships visit and maintaining our financial strength. Wealso strive to be a responsible global corporate citizen and to be a company that people want to work for.

We continue to make progress on many fronts in our sustainability journey and we have expanded our corporategoals beyond our carbon emissions reduction goal to develop 10 new sustainability goals. These goals arefocused on further reducing our environmental footprint by 2020, enhancing the health, safety and security of ourguests and crew members, and ensuring sustainable business practices across our brands and business partners.

Developing and implementing advancements in technology is also an important component of our sustainabilitystrategy. We continue to drive innovation and technological breakthroughs within the cruise and maritimeindustries. We have taken the lead on developing solutions to meet the operational parameters of new fuel-emission regulations and have embarked on a process of installing new exhaust gas cleaning systems on ourships.

In a further effort to have a positive impact, we have introduced our newest brand Fathom, which is pioneering anew travel category we call impact travel. The Fathom approach incorporates mindful, purpose-driven activitiesand programs that enable guests to have a real, sustainable impact on the communities we visit, and a uniquelyrewarding experience.

DELIVERING ALONG THE PATH

Growth is the result of a combination of well-executed business plans and innovation that makes a difference.Our efforts in China, our new ship platforms, our ongoing brand innovations and our investments in the travelexperience of the future are all building blocks. We have much more to do to keep the momentum going in 2016and beyond.

While we briefly celebrate 2015 — an overall very good year for our corporation and our shareholders — weremain focused on our primary objective. We have a clear strategy to deliver double-digit return on investment inthe next two to three years.

Thank you for your confidence and your shared vision of building upon the great legacy that is CarnivalCorporation & plc as we continue to deliver the world’s greatest holiday experiences.

Arnold W. DonaldPresident and Chief Executive OfficerFebruary 19, 2016

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SHAREHOLDER BENEFITCarnival Corporation & plc is pleased to extend the following benefit to our shareholders:

NORTH AMERICABRANDS

CONTINENTALEUROPEBRANDS

UNITED KINGDOMBRANDS

AUSTRALIABRANDS

Onboard credit per stateroom on sailings of 14 days or longer US $250 €200 £150 A$250Onboard credit per stateroom on sailings of 7 to 13 days US $100 € 75 £ 60 A$100Onboard credit per stateroom on sailings of 6 days or less US $ 50 € 40 £ 30 A$ 50

The benefit is applicable on sailings through July 31, 2017 aboard the brands listed below. Certain restrictions apply. Applications to receivethese benefits should be made at least two weeks prior to cruise departure date.

This benefit is available to shareholders holding a minimum of 100 shares of Carnival Corporation or Carnival plc. Employees, travel agentscruising at travel agent rates, tour conductors or anyone cruising on a reduced-rate or complimentary basis are excluded from this offer. Thisbenefit is not transferable, cannot be exchanged for cash and, cannot be used for casino credits/charges and gratuities charged to your onboardaccount. Only one onboard credit per shareholder-occupied stateroom. Reservations must be made by February 28, 2017.

Please provide by fax or by mail your name, reservation number, ship and sailing date, along with proof of ownership of Carnival Corporationor Carnival plc shares (for example, photocopy of shareholder proxy card, shares certificate, a dividend tax voucher or a current brokerage ornominee statement with your brokerage account number blacked out) to your travel agent or to the cruise line you have selected below.

NORTH AMERICA BRANDS

CARNIVAL CRUISE LINE*

Guest Administration3655 N.W. 87th AvenueMiami, FL 33178Tel 800 438 6744 ext. 70450Fax 305 406 6102

PRINCESS CRUISES*Booking Support24303 Town Center Drive, Suite 200Santa Clarita, CA 91355Tel 800 872 6779 ext. 30317Fax 661 753 0180

HOLLAND AMERICA LINE

World Cruise Reservations300 Elliott Avenue WestSeattle, WA 98119Tel 800 522 3399Fax 206 281 0627

SEABOURN

Seabourn Reservations300 Elliott Avenue WestSeattle, WA 98119Tel 800 929 9391Fax 206 501 2900

CUNARD*Booking Support24303 Town Center Drive, Suite 200Santa Clarita, CA 91355Tel 800 872 6779 ext. 30317Fax 661 753 0180

COSTA CRUISES*Guest Services Administration200 S. Park Road, Suite 200Hollywood, FL 33021Tel 800 462 6782Fax 954 266 5868

FATHOM

Fathom Reservations300 Elliott Avenue WestSeattle, WA 98119Tel 855-932-8466Fax 206 905 8881

CONTINENTAL EUROPE BRANDS

COSTA CRUISES*

Manager of ReservationPiazza Piccapietra, 4816121 Genoa, ItalyTel 39 0 10 548 3800Fax 39 0 10 999 7019

AIDA CRUISES

Manager of ReservationsAm Strande 3d18055 Rostock, GermanyTel 49 0 381 2027 0805Fax 49 0 381 2027 0804

UNITED KINGDOM BRANDS

P & O CRUISES (UK)CUNARD*

Senior Shareholder ExecutiveCarnival UKCarnival House100 Harbour ParadeSouthampton SO15 1STUnited Kingdom

P & O CRUISES (UK)Tel 44 0 843 374 0111Fax 44 0 238 065 7360

CUNARDTel 44 0 843 374 0000Fax 44 0 238 065 7360

PRINCESS CRUISES (UK)*

Princess ReservationsCarnival UKCarnival House100 Harbour ParadeSouthampton SO15 1STUnited KingdomTel 44 0 843 373 0333Fax 44 0 238 065 7509

AUSTRALIA BRANDS

P & O CRUISES (AUSTRALIA),PRINCESS CRUISES*CARNIVAL CRUISE LINE*

Customer Service ManagerPO Box 2006North Sydney NSW 2059Tel 61 2 8 424 8800Fax 61 2 8 424 9161

*The onboard credit for Carnival Cruise Line,Costa Cruises, Cunard and Princess Cruises isdetermined based on the operational currencyonboard the vessel. Please visit our corporationwebsite at www.carnivalcorp.com for updates.

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CARNIVAL CORPORATION & PLCCONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

Years Ended November 30,

2015 2014 2013

RevenuesCruise

Passenger tickets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,601 $11,889 $11,648Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,887 3,780 3,598

Tour and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 215 210

15,714 15,884 15,456

Operating Costs and ExpensesCruise

Commissions, transportation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,161 2,299 2,303Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526 519 539Payroll and related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,859 1,942 1,859Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,249 2,033 2,208Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 981 1,005 983Other ship operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,516 2,463 2,610

Tour and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 160 143

9,447 10,421 10,645Selling and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,067 2,054 1,879Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,626 1,637 1,590Ibero trademark impairment charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 13

13,140 14,112 14,127

Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,574 1,772 1,329

Nonoperating (Expense) IncomeInterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8 11Interest expense, net of capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (217) (288) (319)(Losses) gains on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (576) (271) 36Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4 (8)

(775) (547) (280)

Income Before Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,799 1,225 1,049Income Tax (Expense) Benefit, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42) (9) 6

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,757 $ 1,216 $ 1,055

Earnings Per ShareBasic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.57 $ 1.36

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56 $ 1.36

Dividends Declared Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ 1.00 $ 1.00

The accompanying notes are an integral part of these consolidated financial statements.

6

CARNIVAL CORPORATION & PLCCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

Years Ended November 30,

2015 2014 2013

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,757 $1,216 $1,055

Items Included in Other Comprehensive (Loss) IncomeChange in foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . (1,078) (746) 332Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47) (31) 36

Other Comprehensive (Loss) Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,125) (777) 368

Total Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 632 $ 439 $1,423

The accompanying notes are an integral part of these consolidated financial statements.

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CARNIVAL CORPORATION & PLCCONSOLIDATED BALANCE SHEETS

(in millions, except par values)

November 30,

2015 2014

ASSETSCurrent Assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,395 $ 331Trade and other receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 332Insurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 154Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 349Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 322

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,451 1,488

Property and Equipment, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,888 32,819Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,010 3,127Other Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,238 1,270Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 650 744

$39,237 $39,448

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent Liabilities

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30 $ 666Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,344 1,059Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 626Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,683 1,538Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,272 3,032

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,956 6,921

Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,413 7,363Other Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,097 960Commitments and ContingenciesShareholders’ Equity

Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 653shares at 2015 and 652 shares at 2014 issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7

Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2015 and 2014 issued . . . . 358 358Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,562 8,384Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,060 19,158Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,741) (616)Treasury stock, 70 shares at 2015 and 59 shares at 2014 of Carnival Corporation and 27

shares at 2015 and 32 shares at 2014 of Carnival plc, at cost . . . . . . . . . . . . . . . . . . . . . . (3,475) (3,087)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,771 24,204

$39,237 $39,448

The accompanying notes are an integral part of these consolidated financial statements.

8

CARNIVAL CORPORATION & PLCCONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Years Ended November 30,

2015 2014 2013

OPERATING ACTIVITIESNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,757 $ 1,216 $ 1,055Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,626 1,637 1,590(Gains) losses on ship sales and ship impairments, net . . . . . . . . . . . . . . . . . . . . . (8) 2 163Losses (gains) on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576 271 (36)Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 52 42Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 35 62

Changes in operating assets and liabilitiesReceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 75 (128)Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1 21Insurance recoverables, prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . 131 422 424Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 9 79Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (382) (333)Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 92 (105)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,545 3,430 2,834

INVESTING ACTIVITIESAdditions to property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,294) (2,583) (2,149)Proceeds from sale of ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 42 70Payments of fuel derivative settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (219) (2) -Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 36 23

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,478) (2,507) (2,056)

FINANCING ACTIVITIES(Repayments of) proceeds from short-term borrowings, net . . . . . . . . . . . . . . . . . . . (633) 617 4Principal repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,238) (2,466) (2,212)Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,041 1,626 2,687Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (816) (776) (1,164)Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (533) - (138)Sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264 - 35Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27) (29) 8

Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (942) (1,028) (780)

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . (61) (26) (1)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 1,064 (131) (3)Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 462 465

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,395 $ 331 $ 462

The accompanying notes are an integral part of these consolidated financial statements.

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CARNIVAL CORPORATION & PLCCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in millions)

Commonstock

Ordinaryshares

Additionalpaid-incapital

Retainedearnings

Accumulatedother

comprehensive(loss) income

Treasurystock

Totalshareholders’

equity

Balances at November 30, 2012 . . . . $6 $357 $8,252 $18,438 $ (207) $(2,958) $23,888Net income . . . . . . . . . . . . . . . . . . . . - - - 1,055 - - 1,055Other comprehensive income . . . . . - - - - 368 - 368Cash dividends declared . . . . . . . . . - - - (775) - - (775)Purchases and sales under the Stock

Swap program, net . . . . . . . . . . . . - - 10 - - (9) 1Purchases of treasury stock under

the Repurchase Program andother . . . . . . . . . . . . . . . . . . . . . . . 1 1 63 - - (110) (45)

Balances at November 30, 2013 . . . . 7 358 8,325 18,718 161 (3,077) 24,492Net income . . . . . . . . . . . . . . . . . . . . - - - 1,216 - - 1,216Other comprehensive loss . . . . . . . . - - - - (777) - (777)Cash dividends declared . . . . . . . . . - - - (777) - - (777)Other . . . . . . . . . . . . . . . . . . . . . . . . - - 59 1 - (10) 50

Balances at November 30, 2014 . . . . 7 358 8,384 19,158 (616) (3,087) 24,204Net income . . . . . . . . . . . . . . . . . . . . - - - 1,757 - - 1,757Other comprehensive loss . . . . . . . . - - - - (1,125) - (1,125)Cash dividends declared . . . . . . . . . - - - (855) - - (855)Purchases and sales under the Stock

Swap program, net . . . . . . . . . . . . - - 119 - - (112) 7Purchases of treasury stock under

the Repurchase Program andother . . . . . . . . . . . . . . . . . . . . . . . - - 59 - - (276) (217)

Balances at November 30, 2015 . . . . $7 $358 $8,562 $20,060 $(1,741) $(3,475) $23,771

The accompanying notes are an integral part of these consolidated financial statements.

10

CARNIVAL CORPORATION & PLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – General

Description of Business

Carnival Corporation is incorporated in Panama and Carnival plc is incorporated in England and Wales. CarnivalCorporation and Carnival plc operate a dual listed company (“DLC”), whereby the businesses of CarnivalCorporation and Carnival plc are combined through a number of contracts and through provisions in CarnivalCorporation’s Articles of Incorporation and By-Laws and Carnival plc’s Articles of Association. The twocompanies operate as if they are a single economic enterprise, but each has retained its separate legalidentity. Each company’s shares are publicly traded; on the New York Stock Exchange (“NYSE”) for CarnivalCorporation and the London Stock Exchange for Carnival plc. In addition, Carnival plc American DepositoryShares are traded on the NYSE (see Note 3).

We are the largest leisure travel company in the world, and also the largest cruise company. We operate 99 cruiseships within a portfolio of ten leading global, regional and national cruise brands that sell tailored cruiseproducts, services and vacation experiences in all the world’s most important vacation geographic areas. Theconsolidated financial statements include the accounts of Carnival Corporation and Carnival plc and theirrespective subsidiaries. Together with their consolidated subsidiaries, they are referred to collectively in theseconsolidated financial statements and elsewhere in this 2015 Annual Report as “Carnival Corporation & plc,”“our,” “us” and “we.”

Revision of Prior Period Financial Statements

In the first quarter of 2015, we revised and corrected the accounting for one of our brands’ marine and technicalspare parts in order to consistently expense and classify them fleetwide. We evaluated the materiality of thisrevision and concluded that it was not material to any of our previously issued financial statements. However,had we not revised, this accounting may have resulted in material inconsistencies to our financial statements inthe future. Accordingly, we revised all previously reported periods included herein.

The effects of this revision on our Consolidated Statements of Income were as follows (in millions, except pershare data):

Year Ended November 30, 2014 Year Ended November 30, 2013

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

Other ship operating . . . . . . . . . . . . . . . . . . . . . $2,445 $ 18 $2,463 $2,589 $ 21 $2,610Depreciation and amortization . . . . . . . . . . . . . $1,635 $ 2 $1,637 $1,588 $ 2 $1,590Operating income . . . . . . . . . . . . . . . . . . . . . . . $1,792 $ (20) $1,772 $1,352 $ (23) $1,329Income before income taxes . . . . . . . . . . . . . . . $1,245 $ (20) $1,225 $1,072 $ (23) $1,049Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,236 $ (20) $1,216 $1,078 $ (23) $1,055Earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.59 $(0.02) $ 1.57 $ 1.39 $(0.03) $ 1.36Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.59 $(0.03) $ 1.56 $ 1.39 $(0.03) $ 1.36

The effects of this revision on our Consolidated Statements of Comprehensive Income were as follows (inmillions):

Year Ended November 30, 2014 Year Ended November 30, 2013

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,236 $(20) $1,216 $1,078 $(23) $1,055Total comprehensive income . . . . . . . . . . . . . . $ 459 $(20) $ 439 $1,446 $(23) $1,423

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The effects of this revision on our Consolidated Balance Sheet were as follows (in millions):

November 30, 2014

AsPreviouslyReported Adjustment

AsRevised

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 364 $ (15) $ 349Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,503 $ (15) $ 1,488Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $32,773 $ 46 $32,819Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 859 $(115) $ 744Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39,532 $ (84) $39,448Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,242 $ (84) (a) $19,158Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,288 $ (84) $24,204Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39,532 $ (84) $39,448

(a) As of November 30, 2014, the cumulative impact of this revision was an $84 million reduction in retainedearnings. The diluted earnings per share decreases were $0.03 for each of 2014 and 2013, $0.02 for 2012,$0.03 for pre-2010 and $0.11 in the aggregate. There was no annual diluted earnings per share impact for2011 and 2010.

This non-cash revision did not impact our operating cash flows for any period. The effects of this revision on theindividual line items within operating cash flows on our Consolidated Statement of Cash Flows were as follows(in millions):

Year Ended November 30, 2014 Year Ended November 30, 2013

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,236 $(20) $1,216 $1,078 $(23) $1,055Depreciation and amortization . . . . . . . . . . . . . $1,635 $ 2 $1,637 $1,588 $ 2 $1,590Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $ - $ 1 $ 19 $ 2 $ 21Insurance recoverables, prepaid expenses and

other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 401 $ 21 $ 422 $ 402 $ 22 $ 424Accrued and other liabilities . . . . . . . . . . . . . . $ (379) $ (3) $ (382) $ (330) $ (3) $ (333)

The effects of this revision on our Consolidated Statements of Shareholders’ Equity were as follows (inmillions):

November 30, 2014 November 30, 2013 November 30, 2012

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

Retained earnings . . . . $19,242 $(84) $19,158 $18,782 $(64) $18,718 $18,479 $(41) $18,438

NOTE 2 – Summary of Significant Accounting Policies

Basis of Presentation

We consolidate entities over which we have control, as typically evidenced by a voting control of greater than50% or for which we are the primary beneficiary, whereby we have the power to direct the most significantactivities and the obligation to absorb significant losses or receive significant benefits from the entity (see Note3). We do not separately present our noncontrolling interests in the consolidated financial statements since theamounts are insignificant. For affiliates we do not control but where significant influence over financial andoperating policies exists, as typically evidenced by a voting control of 20% to 50%, the investment is accountedfor using the equity method (see Note 5).

Preparation of Financial Statements

The preparation of our consolidated financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates and assumptions that affect theamounts reported and disclosed in our financial statements. Actual results may differ from the estimates used inpreparing our consolidated financial statements. All significant intercompany balances and transactions areeliminated in consolidation. Certain prior period amounts have been reclassified in the Consolidated Balance

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Sheets and the Consolidated Statements of Cash Flows to conform to the current period presentation. Thereclassifications in the Consolidated Statements of Cash Flows had no impact on net cash provided by operatingactivities and net cash used in investing and financing activities.

Cash and Cash Equivalents

Cash and cash equivalents include investments with maturities of three months or less at acquisition, which arestated at cost.

Inventories

Inventories consist substantially of food and beverages, hotel and restaurant products and supplies, fuel and giftshop merchandise held for resale, which are all carried at the lower of cost or market. Cost is determined usingthe weighted-average or first-in, first-out methods.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization were computed using the straight-linemethod over our estimates of useful lives and residual values, as a percentage of original cost, as follows:

YearsResidualValues

Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 15%Ship improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of remaining ship

life or useful life (3-28)0%

Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-35 0% or 10%Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 0% or 10%Transportation equipment and other . . . . . . . . . . . . . . . . . . . . . . . . . . 3-20 0% or 10%Leasehold improvements, including port facilities . . . . . . . . . . . . . . . Shorter of lease term or

related asset life (3-30)-

The cruise industry is very capital intensive, and at January 22, 2016, we operated 99 cruise ships. Therefore, wehave a capital program that we develop for the improvement of our ships and for asset replacements in order toenhance the effectiveness and efficiency of our operations; comply with, or exceed all relevant legal andstatutory requirements related to health, environment, safety, security and sustainability; and gain strategicbenefits or provide newer improved product innovations to our guests.

Ship improvement costs that we believe add value to our ships, such as those discussed above, are capitalized tothe ships and depreciated over the shorter of their or the ships’ estimated remaining useful life, while costs ofrepairs and maintenance, including minor improvement costs and dry-dock expenses, are charged to expense asincurred and included in other ship operating expenses. Dry-dock costs primarily represent planned majormaintenance activities that are incurred when a ship is taken out-of-service for scheduled maintenance. Wecapitalize interest as part of the cost of acquiring ships and other capital projects during their construction period.The specifically identified or estimated cost and accumulated depreciation of previously capitalized shipcomponents are written-off upon retirement, which may result in a loss on disposal that is also included in othership operating expenses. Liquidated damages received from shipyards as a result of their late ship delivery arerecorded as reductions to the cost basis of the ship.

We review our long-lived assets, principally our ships, for impairment whenever events or changes incircumstances indicate that the carrying amounts of these assets may not be fully recoverable. Upon theoccurrence of a triggering event, the assessment of possible impairment is based on our ability to recover thecarrying value of our asset, which is determined by using the asset’s estimated undiscounted future cash flows. Ifthese estimated undiscounted future cash flows are less than the carrying value of the asset, an impairment chargeis recognized for the excess, if any, of the asset’s carrying value over its estimated fair value. As it relates to ourships, the lowest level for which we maintain identifiable cash flows that are independent of the cash flows ofother assets and liabilities is at the individual ship level. A significant amount of judgment is required inestimating the future cash flows and fair values of our cruise ships.

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Intangibles

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in abusiness acquisition. We review our goodwill for impairment at least annually and, when events or circumstancesdictate, more frequently. All of our goodwill has been allocated to our reporting units, also referred to as “cruisebrands.” The impairment review for goodwill allows us to first assess qualitative factors to determine whether itis necessary to perform the more detailed two-step quantitative goodwill impairment test. We would perform thequantitative test if our qualitative assessment determined it is more-likely-than-not that a cruise brand’s estimatedfair value is less than its carrying amount. We may also elect to bypass the qualitative assessment and proceeddirectly to the quantitative test for any cruise brand. When performing the quantitative test, if the estimated fairvalue of the cruise brand exceeds its carrying value, no further analysis or write-down of goodwill is required.However, if the estimated fair value of the cruise brand is less than the carrying value of its net assets, theestimated fair value of the cruise brand is assigned to all its underlying assets and liabilities, including bothrecognized and unrecognized tangible and intangible assets, based on their fair values. If necessary, goodwill isthen written down to its implied fair value.

Trademarks represent substantially all of our other intangibles. For certain acquisitions, we have allocated aportion of the purchase prices to the acquiree’s identified trademarks. Trademarks are estimated to have anindefinite useful life and, therefore, are not amortizable, but are reviewed for impairment at least annually and,when events or circumstances dictate, more frequently. The impairment review for trademarks also allows us tofirst assess qualitative factors to determine whether it is necessary to perform a more detailed quantitativetrademark impairment test. We would perform the quantitative test if our qualitative assessment determined itwas more-likely-than-not that the trademarks are impaired. We may also elect to bypass the qualitativeassessment and proceed directly to the quantitative test. Our trademarks would be considered impaired if theircarrying value exceeds their estimated fair value. The costs of developing and maintaining our trademarks areexpensed as incurred.

A significant amount of judgment is also required in estimating the fair values of our cruise brands andtrademarks.

Revenue and Expense Recognition

Guest cruise deposits represent unearned revenues and are initially included in customer deposit liabilities whenreceived. Customer deposits are subsequently recognized as cruise revenues, together with revenues fromonboard and other activities, and all associated direct costs and expenses of a voyage are recognized as cruisecosts and expenses, upon completion of voyages with durations of ten nights or less and on a pro rata basis forvoyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues and costs andexpenses on a completed voyage basis versus on a pro rata basis is not significant. Future travel discountvouchers issued to guests and ship charterers are included as a reduction of cruise passenger ticket revenues whensuch vouchers are utilized or upon issuance to certain ship charterers. Guest cancellation fees are recognized incruise passenger ticket revenues at the time of the cancellation.

Our sale to guests of air and other transportation to and from airports near the home ports of our ships areincluded in cruise passenger ticket revenues, and the related cost of purchasing these services are included incruise transportation costs. The proceeds that we collect from the sales of third-party shore excursions and onbehalf of our onboard concessionaires, net of the amounts remitted to them, are included in onboard and othercruise revenues as concession revenues. All of these amounts are recognized on a completed voyage or pro ratabasis as discussed above.

Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. A portion ofthese fees, taxes and charges vary with guest head counts and are directly imposed on a revenue-producingarrangement. This portion of the fees, taxes and charges is expensed in commissions, transportation and othercosts when the corresponding revenues are recognized. These fees, taxes and charges included in passenger ticketrevenues and commissions, transportation and other costs were $524 million in 2015, $532 million in 2014 and$517 million in 2013. The remaining portion of fees, taxes and charges are also included in cruise passengerticket revenues but are expensed in other ship operating expenses when the corresponding revenues arerecognized.

Revenues and expenses from our hotel and transportation operations, which are included in our Tour and Othersegment, are recognized at the time the services are performed or expenses are incurred. Revenues from the long-

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term leasing of ships, which are also included in our Tour and Other segment, are recognized ratably over theterm of the charter agreement using the straight-line method (see Note 12).

Insurance

We maintain insurance to cover a number of risks including illness and injury to crew, guest injuries, pollution,other third-party claims in connection with our cruise activities, damages to hull and machinery for each of ourships, war risks, workers compensation, employee health, directors and officers liability, property damages andgeneral liabilities for third-party claims. We recognize insurance recoverables from third-party insurers forincurred expenses at the time the recovery is probable and upon realization for amounts in excess of incurredexpenses. All of our insurance policies are subject to coverage limits, exclusions and deductible levels. Theliabilities associated with crew illnesses and crew and guest injury claims, including all legal costs, are estimatedbased on the specific merits of the individual claims or actuarially estimated based on historical claimsexperience, loss development factors and other assumptions.

Selling and Administrative Expenses

Selling expenses include a broad range of advertising, such as marketing and promotional expenses. Advertisingis charged to expense as incurred, except for media production costs, which are expensed upon the first airing ofthe advertisement. Advertising expenses totaled $627 million in 2015, $623 million in 2014 and $588 million in2013. Administrative expenses represent the costs of our shoreside ship support, reservations and otheradministrative functions, and includes salaries and related benefits, professional fees and building occupancycosts, which are typically expensed as incurred.

Foreign Currency Translations and Transactions

Each business determines its functional currency by reference to its primary economic environment. We translatethe assets and liabilities of our foreign operations that have functional currencies other than the U.S. dollar atexchange rates in effect at the balance sheet date. Revenues and expenses of these foreign operations aretranslated at weighted-average exchange rates for the period. Their equity is translated at historical rates and theresulting foreign currency translation adjustments are included as a component of accumulated othercomprehensive income (“AOCI”), which is a separate component of shareholders’ equity. Therefore, the U.S.dollar value of the non-equity translated items in our consolidated financial statements will fluctuate from periodto period, depending on the changing value of the U.S. dollar versus these currencies.

We execute transactions in a number of different currencies, principally the euro, sterling and Australian,Canadian and U.S. dollars. Exchange rate gains and losses arising from changes in foreign currency exchangerates between the time an expense is recorded and when it is settled as well as the remeasurement of monetaryassets and liabilities, all denominated in a currency other than the functional currency of the entity involved, arerecognized currently in nonoperating earnings, unless such monetary liabilities have been designated to act ashedges of net investments in our foreign operations. The net gains or losses resulting from these “nonoperatingforeign currency transactions” were insignificant in 2015, 2014 and 2013. In addition, the unrealized gains orlosses on our long-term intercompany receivables denominated in a non-functional currency, which are notexpected to be repaid in the foreseeable future and are therefore considered to form part of our net investments,are recorded as foreign currency translation adjustments, which are included as a component of AOCI.

Share-Based Compensation

We recognize compensation expense for all share-based compensation awards using the fair value method. Fortime-based share awards, we recognize compensation cost ratably using the straight-line attribution method overthe expected vesting period or to the retirement eligibility date, if less than the vesting period, when vesting is notcontingent upon any future performance. For performance-based share awards, we generally recognizecompensation cost ratably using the straight-line attribution method over the expected vesting period based onthe probability of the performance condition being achieved. If all or a portion of the performance condition isnot expected to be met, the appropriate amount of previously recognized compensation expense will be reversedand future compensation expense will be adjusted accordingly. For market-based share awards, we recognizecompensation cost ratably using the straight-line attribution method over the expected vesting period. If the targetmarket conditions are not expected to be met, compensation expense will still be recognized. In addition, weestimate the amount of expected forfeitures based on historical forfeiture experience when calculatingcompensation cost. We revise our forfeiture estimates, if the actual forfeitures that occur are significantlydifferent from our estimates.

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Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of sharesoutstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares and common stock equivalents outstanding during each period. For earnings per sharepurposes, Carnival Corporation common stock and Carnival plc ordinary shares are considered a single class ofshares since they have equivalent rights (see Note 3).

Accounting Pronouncements

In 2014, amended guidance was issued by the Financial Accounting Standards Board (“FASB”) regarding theaccounting for Service Concession Arrangements. The new guidance defines a service concession as anarrangement between a public-sector grantor, such as a port authority, and a company that will operate andmaintain the grantor’s infrastructure for a specified period of time. In exchange, the company may be given aright to charge the public, such as our cruise guests, for the use of the infrastructure. This guidance will requireus to record the infrastructure we have constructed to be used by us pursuant to a service concession arrangementoutside of property and equipment. As required, we will adopt this guidance in our first quarter of 2016. Suchadoption will not have a material impact to our consolidated financial statements.

In 2014, the FASB issued Revenue from Contracts with Customers, which requires an entity to recognize theamount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.When effective, this standard will replace most existing revenue recognition guidance in U.S. generally acceptedaccounting principles (“U.S. GAAP”). The standard also requires more detailed disclosures and providesadditional guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance isrequired to be adopted by us in the first quarter of fiscal 2019 by either recasting all years presented in ourfinancial statements or by recording the impact of adoption as an adjustment to retained earnings at the beginningof the year of adoption. We are currently evaluating the impact that this guidance will have on our consolidatedfinancial statements.

NOTE 3 – DLC Arrangement

In 2003, Carnival Corporation and Carnival plc completed a DLC transaction, which implemented CarnivalCorporation and Carnival plc’s DLC arrangement. The contracts governing the DLC arrangement provide thatCarnival Corporation and Carnival plc each continue to have separate boards of directors, but the boards andsenior executive management of both companies are identical. The constitutional documents of each of thecompanies also provide that, on most matters, the holders of the common equity of both companies effectivelyvote as a single body. On specified matters where the interests of Carnival Corporation’s shareholders may differfrom the interests of Carnival plc’s shareholders (a “class rights action” such as transactions primarily designedto amend or unwind the DLC arrangement), each shareholder body will vote separately as a class. Generally, noclass rights action will be implemented unless approved by both shareholder bodies.

Upon the closing of the DLC transaction, Carnival Corporation and Carnival plc also executed the Equalizationand Governance Agreement, which provides for the equalization of dividends and liquidation distributions basedon an equalization ratio and contains provisions relating to the governance of the DLC arrangement. Because theequalization ratio is 1 to 1, one Carnival plc ordinary share is entitled to the same distributions, subject to theterms of the Equalization and Governance Agreement, as one share of Carnival Corporation common stock. In aliquidation of either company or both companies, if the hypothetical potential per share liquidation distributionsto each company’s shareholders are not equivalent, taking into account the relative value of the two companies’assets and the indebtedness of each company, to the extent that one company has greater net assets so that anyliquidation distribution to its shareholders would not be equivalent on a per share basis, the company with theability to make a higher net distribution is required to make a payment to the other company to equalize thepossible net distribution to shareholders, subject to certain exceptions.

At the closing of the DLC transaction, Carnival Corporation and Carnival plc also executed deeds of guarantee.Under the terms of Carnival Corporation’s deed of guarantee, Carnival Corporation has agreed to guarantee allindebtedness and certain other monetary obligations of Carnival plc that are incurred under agreements enteredinto on or after the closing date of the DLC transaction. The terms of Carnival plc’s deed of guarantee mirrorthose of Carnival Corporation’s. In addition, Carnival Corporation and Carnival plc have each extended theirrespective deeds of guarantee to the other’s pre-DLC indebtedness and certain other monetary obligations, oralternatively have provided standalone guarantees in lieu of utilization of these deeds of guarantee, thus

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effectively cross guaranteeing all Carnival Corporation and Carnival plc indebtedness and certain other monetaryobligations. Each deed of guarantee provides that the creditors to whom the obligations are owed are intendedthird-party beneficiaries of such deed of guarantee.

The deeds of guarantee are governed and construed in accordance with the laws of the Isle of Man. Subject to theterms of the deeds of guarantee, the holders of indebtedness and other obligations that are subject to the deeds ofguarantee will have recourse to both Carnival plc and Carnival Corporation, though a Carnival plc creditor mustfirst make written demand on Carnival plc and a Carnival Corporation creditor on Carnival Corporation. Oncethe written demand is made by letter or other form of notice, the holders of indebtedness or other obligations mayimmediately commence an action against the relevant guarantor. Accordingly, there is no requirement under thedeeds of guarantee to obtain a judgment, take other enforcement actions or wait any period of time prior to takingsteps against the relevant guarantor. All actions or proceedings arising out of or in connection with the deeds ofguarantee must be exclusively brought in courts in England.

Under the terms of the DLC transaction documents, Carnival Corporation and Carnival plc are permitted totransfer assets between the companies, make loans to or investments in each other and otherwise enter intointercompany transactions. The companies have entered into some of these types of transactions and may enterinto additional transactions in the future to take advantage of the flexibility provided by the DLC arrangement,and to operate both companies as a single unified economic enterprise in the most effective manner. In addition,under the terms of the Equalization and Governance Agreement and the deeds of guarantee, the cash flows andassets of one company are required to be used to pay the obligations of the other company, if necessary.

Given the DLC arrangement, we believe that providing separate financial statements for each of CarnivalCorporation and Carnival plc would not present a true and fair view of the economic realities of their operations.Accordingly, separate financial statements for both Carnival Corporation and Carnival plc have not beenpresented.

NOTE 4 – Property and Equipment

Property and equipment consisted of the following (in millions):

November 30,

2015 2014

Ships, including ship improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,401 $ 42,955Ships under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839 536

43,240 43,491Land, buildings and improvements, including leasehold improvements and port

facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,161 1,088Computer hardware and software, transportation equipment and other . . . . . . . . . . . . . . . 1,389 1,322

Total property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,790 45,901Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,902) (13,082)

$ 31,888 (a) $ 32,819 (a)

(a) At November 30, 2015 and 2014, the net carrying values of ships and ships under construction for our NorthAmerica, EAA, Cruise Support and Tour and Other segments were $18.5 billion, $11.7 billion, $0.3 billionand $0.1 billion and $18.7 billion, $12.6 billion, $0.3 billion and $0.1 billion, respectively.

Ships under construction include progress payments for the construction of new ships, as well as design andengineering fees, capitalized interest, construction oversight costs and various owner supplied items. Capitalizedinterest, substantially all included in our ships under construction, amounted to $22 million in 2015, $21 millionin 2014 and $15 million in 2013.

Repairs and maintenance expenses, including minor improvement costs and dry-dock expenses, were $1.0 billionin 2015, $936 million in 2014 and $974 million in 2013, and are substantially all included in other ship operatingexpenses.

See Note 11 for a discussion regarding ship sales and impairments.

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NOTE 5 – Other Assets

We have a 40% noncontrolling interest in Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair andmaintenance facility, and we account for this investment under the equity method of accounting. This facilityserves cruise and cargo ships, oil and gas tankers and offshore units. We utilize this facility, among other shiprepair facilities, for our regularly scheduled dry-docks and certain emergency repairs as may be required. GrandBahama provided services to us of $33 million in 2015, $41 million in 2014 and $39 million in 2013. Thecarrying value of our investment in Grand Bahama was $69 million at November 30, 2015 and November 30,2014. Our share of income from this investment was $5 million in 2015, $0.2 million in 2014 and $4 million in2013 and is included in nonoperating other income (expense), net.

NOTE 6 – Unsecured Debt

Long-term debt and short-term borrowings consisted of the following (in millions):

November 30, 2015 November 30,

Interest RatesMaturitiesThrough 2015 (a) 2014 (a)

Long-Term DebtExport Credit FacilitiesFixed rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2% to 5.5% 2020 $ 1,032 $ 1,358Euro fixed rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8% to 4.5% 2025 261 340Floating rate (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5% 2026 688 1,031Euro floating rate (b)(d) . . . . . . . . . . . . . . . . . . . . . . . . . 0.1% to 0.9% 2027 1,864 1,909Bank LoansEuro fixed rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9% 2021 160 221Floating rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8% to 1.3% 2019 800 800Euro floating rate (b)(e) . . . . . . . . . . . . . . . . . . . . . . . . . 0.7% 2018 212 249Private Placement NotesFixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0% 2016 42 116Euro fixed rate (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0% to 7.3% 2018 130 153Publicly-Traded NotesFixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2% to 7.2% 2028 2,219 2,219Euro fixed rate (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1% to 1.9% 2022 1,324 -Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5% to 7.3% 2030 25 26Short-Term BorrowingsFloating rate commercial paper (g) . . . . . . . . . . . . . . . . . -% 2016 - 653Euro floating rate bank loans (g) . . . . . . . . . . . . . . . . . . 1.2% 2016 30 13

Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,787 9,088Less short-term borrowings . . . . . . . . . . . . . . . . . . . . . . (30) (666)Less current portion of long-term debt . . . . . . . . . . . . . . (1,344) (1,059)

Total Long-term Debt . . . . . . . . . . . . . . . . . . . . . . $ 7,413 $ 7,363

(a) The debt table does not include the impact of our foreign currency and interest rate swaps. At November 30,2015, 50% and 50% (67% and 33% at November 30, 2014) of our debt was U.S. dollar and euro-denominated, respectively, including the effect of foreign currency swaps. At November 30, 2015, 60% and40% (52% and 48% at November 30, 2014) of our debt bore fixed and floating interest rates, respectively,including the effect of interest rate swaps. Substantially all of our fixed rate debt can only be called orprepaid by incurring additional costs. In addition, substantially all of our debt agreements, including ourmain revolving credit facility, contain one or more financial covenants that require us, among other things,to maintain minimum debt service coverage and minimum shareholders’ equity and to limit our debt tocapital and debt to equity ratios and the amounts of our secured assets and secured and other indebtedness.Generally, if an event of default under any debt agreement occurs, then pursuant to cross defaultacceleration clauses, substantially all of our outstanding debt and derivative contract payables (see Note 11)could become due, and all debt and derivative contracts could be terminated. At November 30, 2015, wewere in compliance with all of our debt covenants.

(b) Includes $2.0 billion of debt whose interest rates, and in the case of our main revolver its commitment fees,would increase upon a downgrade in the long-term senior unsecured credit ratings of Carnival Corporationor Carnival plc.

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(c) In 2015, we repaid $225 million outstanding under a floating rate export credit facility prior to its maturitythrough 2025 (see (e) below).

(d) In 2015, we borrowed $472 million under a euro-denominated, floating rate export credit facility, theproceeds of which were used to pay for a portion of P&O Cruises (UK)’s Britannia purchase price. Thisdebt is due in semi-annual installments through February 2027.

(e) In 2015, we borrowed $225 million under a euro-denominated, floating rate bank loan, which is due inOctober 2018. We used the net proceeds of this loan to prepay an equivalent amount outstanding under afloating rate export credit facility prior to its maturity.

(f) In 2015, we issued $753 million and $591 million of euro-denominated, publicly-traded notes, which bearinterest at 1.125% and 1.875% and are due in November 2019 and November 2022, respectively. We areusing the net proceeds for general corporate purposes.

(g) The interest rate associated with our floating rate short-term borrowings represents an aggregate weighted-average interest rate.

At November 30, 2015, the scheduled annual maturities of our debt were as follows (in millions):

Fiscal

2016 2017 2018 2019 2020 Thereafter Total

Short-term borrowings . . . . . . . . . . . . . . . . . . $ 30 $ - $ - $ - $ - $ - $ 30Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 1,344 1,007 1,477 1,400 1,110 2,419 8,757

$1,374 $1,007 $1,477 $1,400 $1,110 $2,419 $8,787

Debt issuance costs are generally amortized to interest expense using the straight-line method, whichapproximates the effective interest method, over the term of the debt. In addition, all debt issue discounts areamortized to interest expense using the effective interest rate method over the term of the notes.

Committed Ship Financings

We have unsecured euro and U.S. dollar long-term export credit committed ship financings in order to pay for aportion of our ships’ purchase prices. These commitments, if drawn, are repayable semi-annually over 12 years.We have the option to cancel each one at specified dates prior to the underlying ship’s delivery date.

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At November 30, 2015, our committed ship financings are as follows:

Cruise Brands and Ships

Fiscal YearAvailable for

Funding Amount(in millions)

North AmericaCarnival Cruise LineCarnival Vista (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2016 $ 520Newbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 478

Holland America LineKoningsdam (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2016 408Newbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 380

PrincessMajestic Princess (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 478

SeabournSeabourn Encore (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2016 190Seabourn Ovation (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 193

North America Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,647

EAAAIDAAIDAprima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2016 371Newbuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 360Newbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 768Newbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 785

CostaNewbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 776Newbuild (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 785

EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,845

$6,492

(a) Euro-denominated.(b) We have the option to draw in either U.S. dollars or euros.

Revolving Credit Facilities

In April 2015, Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc’ssubsidiaries exercised their option to extend the termination date of their five-year multi-currency revolvingcredit facility (the “Facility”) of $2.5 billion (comprised of $1.7 billion, €500 million and £150 million) fromJune 2019 to June 2020, which was approved by each bank. We also have an option to extend this Facilitythrough June 2021 subject to the approval of each bank. The Facility currently bears interest at LIBOR/EURIBOR plus a margin of 40 basis points (“bps”). The margin varies based on changes to CarnivalCorporation’s and Carnival plc’s long-term senior unsecured credit ratings. We are required to pay a commitmentfee of 35% of the margin per annum on any undrawn portion. We will also incur an additional utilization fee of10 bps, 20 bps or 40 bps if equal to or less than one-third, more than one-third or more than two-thirds of theFacility, respectively, is drawn on the total amount outstanding.

At November 30, 2015, we have one other undrawn revolving credit facility for $300 million that expires in 2020and provides us with additional liquidity. At November 30, 2015, $2.8 billion was available under all of ourrevolving credit facilities.

NOTE 7 – Commitments

Ship Commitments

At November 30, 2015, including ship construction contracts entered into through January 22, 2016, we had 17ships under contract for construction with an aggregate passenger capacity of more than 61,300 lower berths. Theestimated total cost of these ships is $11.9 billion, which includes the contract prices with the shipyards, design

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and engineering fees, capitalized interest, construction oversight costs and various owner supplied items. Wehave paid $0.8 billion through November 30, 2015 and anticipate paying $1.9 billion in 2016, $1.3 billion in2017, $2.5 billion in 2018, $3.0 billion in 2019 and $2.4 billion in 2020 of the remaining estimated total costs.

Operating Leases, Port Facilities and Other Commitments

Rent expense under our operating leases, primarily for office and warehouse space, was $70 million in 2015, $63million in 2014 and $61 million in 2013.

At November 30, 2015, minimum amounts payable for our operating leases, with initial or remaining terms inexcess of one year, and for the annual usage of port facilities and other contractual commitments with remainingterms in excess of one year, were as follows (in millions):

Fiscal

2016 2017 2018 2019 2020 Thereafter Total

Operating leases . . . . . . . . . . $ 52 $ 41 $ 34 $ 31 $ 29 $203 $ 390Port facilities and other . . . . . 211 200 161 104 102 793 1,571

$263 $241 $195 $135 $131 $996 $1,961

NOTE 8 – Contingencies

Litigation

The UK Maritime & Coastguard Agency and the U.S. Department of Justice are investigating allegations thatCaribbean Princess breached international pollution laws. We are cooperating with the investigations, includingconducting our own internal investigation into the matter. The ultimate outcome of this matter cannot bedetermined at this time, however, we do not expect it to have a material impact on our results of operations.

As a result of a January 2012 ship incident, litigation claims and investigations, including, but not limited to,those arising from personal injury, loss of or damage to personal property, business interruption losses orenvironmental damage to any affected coastal waters and the surrounding areas, have been and may be assertedor brought against various parties, including us. The ultimate outcome of these matters cannot be determined atthis time. However, we do not expect these matters to have a significant impact on our results of operationsbecause we have insurance coverage for these types of third-party claims.

Additionally, in the normal course of our business, various claims and lawsuits have been filed or are pendingagainst us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount ofour liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels.Management believes the ultimate outcome of these claims and lawsuits will not have a material impact on ourconsolidated financial statements.

Contingent Obligations – Lease Out and Lease Back Type (“LILO”) Transactions

At November 30, 2015, Carnival Corporation had estimated contingent obligations totaling $382 million,excluding termination payments as discussed below, to participants in LILO transactions for two of its ships. Atthe inception of these leases, the aggregate of the net present value of these obligations was paid by CarnivalCorporation to a group of major financial institutions, who agreed to act as payment undertakers and directly paythese obligations. As a result, these contingent obligations are considered extinguished and neither the funds northe contingent obligations have been included in our Consolidated Balance Sheets.

In the event that Carnival Corporation were to default on its contingent obligations and assuming performance byall other participants, we estimate that it would, as of November 30, 2015, be responsible for a terminationpayment of $22 million. In January 2016, Carnival Corporation elected to exercise its options to terminate eachof these LILO transactions on January 1, 2017 for one ship and January 1, 2018 for the other, at no cost to it.

If the credit rating of one of the financial institutions who is directly paying the contingent obligations falls belowAA-, or below A- for the other financial institution, then Carnival Corporation will be required to replace theapplicable financial institution with another financial institution whose credit rating is at least AA or meets otherspecified credit requirements. In such circumstances, it would incur additional costs, although we estimate that

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they would not be significant to our consolidated financial statements. The financial institution paymentundertaker subject to the AA- credit rating threshold has a credit rating of AA, and the financial institutionsubject to the A- credit rating threshold has a credit rating of A+. If Carnival Corporation’s credit rating, which isBBB+, falls below BBB, it will be required to provide a standby letter of credit for $32 million, or, alternatively,provide mortgages for this aggregate amount on these two ships.

Contingent Obligations – Indemnifications

Some of the debt contracts that we enter into include indemnification provisions that obligate us to makepayments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes andchanges in laws that increase lender capital costs and other similar costs. The indemnification clauses are oftenstandard contractual terms and were entered into in the normal course of business. There are no stated or notionalamounts included in the indemnification clauses, and we are not able to estimate the maximum potential amountof future payments, if any, under these indemnification clauses. We have not been required to make any materialpayments under such indemnification clauses in the past and, under current circumstances, we do not believe arequest for material future indemnification payments is probable.

NOTE 9 – Taxation

A summary of our principal taxes and exemptions in the jurisdictions where our significant operations are locatedis as follows:

U.S. Income Tax

We are primarily foreign corporations engaged in the business of operating cruise ships in internationaltransportation. We also own and operate, among other businesses, the U.S. hotel and transportation business ofHolland America Princess Alaska Tours through U.S. corporations.

Our North American cruise ship businesses and certain ship-owning subsidiaries are engaged in a trade orbusiness within the U.S. Depending on its itinerary, any particular ship may generate income from sources withinthe U.S. We believe that our U.S. source income and the income of our ship-owning subsidiaries, to the extentderived from, or incidental to, the international operation of a ship or ships, is currently exempt from U.S. federalincome and branch profit taxes.

Our domestic U.S. operations, principally the hotel and transportation business of Holland America PrincessAlaska Tours, are subject to federal and state income taxation in the U.S.

In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our NorthAmerican cruise ship businesses) are not subject to U.S. federal income tax or branch profits tax on U.S. sourceincome derived from, or incidental to, the international operation of a ship or ships. Applicable U.S. Treasuryregulations provide in general that a foreign corporation will qualify for the benefits of Section 883 if, in relevantpart, (i) the foreign country in which the foreign corporation is organized grants an equivalent exemption tocorporations organized in the U.S. (an “equivalent exemption jurisdiction”) and (ii) the foreign corporation meetsa defined publicly-traded test. Subsidiaries of foreign corporations that are organized in an equivalent exemptionjurisdiction and meet the publicly-traded test also benefit from Section 883. We believe that Panama is anequivalent exemption jurisdiction and Carnival Corporation currently qualifies as a publicly-traded corporationunder the regulations. Accordingly, substantially all of Carnival Corporation’s income is exempt from U.S.federal income and branch profit taxes.

Regulations under Section 883 list items that the Internal Revenue Service (“IRS”) does not consider to beincidental to ship operations. Among the items identified as not incidental are income from the sale of airtransportation, transfers, shore excursions and pre- and post-cruise land packages to the extent earned fromsources within the U.S.

We believe that the U.S. source transportation income earned by Carnival plc and its Italian resident subsidiarycurrently qualifies for exemption from U.S. federal income tax under applicable bilateral U.S. income taxtreaties.

Carnival Corporation and Carnival plc and certain of their subsidiaries are subject to various U.S. state incometaxes generally imposed on each state’s portion of the U.S. source income subject to U.S. federal income taxes.However, the state of Alaska imposes an income tax on its allocated portion of the total income of our companiesdoing business in Alaska and certain of their subsidiaries.

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UK and Australian Income Tax

Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to enterthe UK tonnage tax on a rolling 10-year term and, accordingly, reapply every year. Companies to which thetonnage tax regime applies pay corporation taxes on profits calculated by reference to the net tonnage ofqualifying ships. UK corporation tax is not chargeable under the normal UK tax rules on these brands’ relevantshipping income. Relevant shipping income includes income from the operation of qualifying ships and fromshipping related activities.

For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters,operate qualifying ships that are strategically and commercially managed in the UK. Companies within UKtonnage tax are also subject to a seafarer training requirement.

Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to normalUK corporation tax. Dividends received from subsidiaries of Carnival plc doing business outside the UK aregenerally exempt from UK corporation tax.

P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the cruisesegment of the Australian vacation market are exempt from Australian corporation tax by virtue of the UK/Australian income tax treaty.

Italian and German Income Tax

In early 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapplyfor an additional ten-year period beginning in early 2025. Companies to which the tonnage tax regime appliespay corporation taxes on shipping profits calculated by reference to the net tonnage of qualifying ships.

Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime willbe taxed at an effective tax rate of 5.5%.

Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Italy/Germanyincome tax treaty.

Income and Other Taxes in Asian Countries

Substantially all of our brands’ income from their international operation in Asian countries is exempt from localcorporation tax by virtue of relevant income tax treaties.

Other

We recognize income tax benefits for uncertain tax positions, based solely on their technical merits, when it ismore likely than not to be sustained upon examination by the relevant tax authority. The tax benefit to berecognized is measured as the largest amount of benefit that is greater than 50% likely of being realized uponultimate resolution. All interest expense related to income tax liabilities is included in income tax expense. Basedon all known facts and circumstances and current tax law, we believe that the total amount of our uncertainincome tax position liabilities and related accrued interest are not significant to our financial position.

We do not expect to incur income taxes on future distributions of undistributed earnings of foreign subsidiariesand, accordingly, no deferred income taxes have been provided for the distribution of these earnings. In additionto or in place of income taxes, virtually all jurisdictions where our ships call impose taxes, fees and other chargesbased on guest counts, ship tonnage, passenger capacity or some other measure, and these taxes, fees and othercharges are included in commissions, transportation and other costs and other ship operating expenses.

NOTE 10 – Shareholders’ Equity

Carnival Corporation’s Articles of Incorporation authorize its Board of Directors, at its discretion, to issue up to40 million shares of preferred stock. At November 30, 2015 and 2014, no Carnival Corporation preferred stockhad been issued and only a nominal amount of Carnival plc preference shares had been issued. Our Boards ofDirectors have authorized, subject to certain restrictions, the repurchase of up to an aggregate of $1.0 billion ofCarnival Corporation common stock and/or Carnival plc ordinary shares (the “Repurchase Program”). TheRepurchase Program does not have an expiration date and may be discontinued by our Boards of Directors at anytime.

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During 2015, we repurchased 5.3 million shares of Carnival Corporation common stock for $276 million underthe Repurchase Program. In 2014, there were no repurchases of Carnival Corporation common stock under theRepurchase Program. In 2013, we repurchased 2.8 million shares of Carnival Corporation common stock for$103 million under the Repurchase Program. In 2015, 2014 and 2013, there were no repurchases of Carnival plcordinary shares under the Repurchase Program. From December 1, 2015 through January 27, 2016, werepurchased 9.6 million shares of Carnival Corporation common stock for $486 million under the RepurchaseProgram. On January 28, 2016, the Board of Directors approved a modification of the Repurchase Programauthorization that increased the remaining $213 million of authorized repurchases by $1.0 billion. Accordingly,at January 28, 2016, the remaining availability under the Repurchase Program was $1.2 billion.

In addition to the Repurchase Program, the Boards of Directors authorized, in October 2008, the repurchase of upto 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares ofCarnival Corporation common stock under the Stock Swap (“Stock Swap”) programs described below. Under theStock Swap programs, we sell shares of Carnival Corporation common stock and/or Carnival plc ordinary shares,as the case may be, and use a portion of the net proceeds to purchase an equivalent number of Carnival plcordinary shares or shares of Carnival Corporation common stock, as applicable. We use the Stock Swapprograms in situations where we can obtain an economic benefit because either Carnival Corporation commonstock or Carnival plc ordinary shares are trading at a price that is at a premium or discount to the price ofCarnival plc ordinary shares or Carnival Corporation common stock, as the case may be. Any realized economicbenefit under the Stock Swap programs is used for general corporate purposes, which could include repurchasingadditional stock under the Repurchase Program. Depending on market conditions and other factors, we mayrepurchase shares of Carnival Corporation common stock and/or Carnival plc ordinary shares under theRepurchase Program and the Stock Swap programs concurrently.

Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap programsrequire annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.5 millionordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annual general meeting orJuly 13, 2016. At January 22, 2016, the remaining availability under the Stock Swap programs was 18.1 millionCarnival plc ordinary shares and 26.9 million shares of Carnival Corporation common stock.

During 2015 and 2013, under the Stock Swap programs, Carnival Investments Limited (“CIL”), a subsidiary ofCarnival Corporation, sold 5.1 million and 0.9 million of Carnival plc ordinary shares for net proceeds of $264million and $35 million, respectively. Substantially all of the net proceeds from these sales were used to purchase5.1 million shares in 2015 and 0.9 million shares in 2013 of Carnival Corporation common stock. CarnivalCorporation sold these Carnival plc ordinary shares owned by CIL only to the extent it was able to repurchaseshares of Carnival Corporation common stock in the U.S. on at least an equivalent basis. During 2015 and 2013,no Carnival Corporation common stock was sold or Carnival plc ordinary shares were repurchased under theStock Swap program. During 2014, no Carnival Corporation common stock or Carnival plc ordinary shares weresold or repurchased under the Stock Swap programs.

At November 30, 2015, there were 14.7 million shares of Carnival Corporation common stock reserved forissuance under its employee benefit and dividend reinvestment plans. At November 30, 2015, there were8.2 million ordinary shares of Carnival plc authorized for future issuance under its employee benefit plans.

Accumulated other comprehensive loss was as follows (in millions):

November 30,

2015 2014

Cumulative foreign currency translation adjustments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,591) $(512)Unrecognized pension expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82) (90)Unrealized losses on marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (5)Net losses on cash flow derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65) (9)

$(1,741) $(616)

During 2015 and 2014, $13 million and $18 million of unrecognized pension expenses were reclassified out ofaccumulated other comprehensive loss, of which $8 million and $12 million were included in payroll and relatedexpenses and $5 million and $6 million were included in selling and administrative expenses, respectively.

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NOTE 11 – Fair Value Measurements, Derivative Instruments and Hedging Activities

Fair Value Measurements

U.S. accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value.The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets orliabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Thishierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.The three levels of inputs used to measure fair value are as follows:

• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets orliabilities that we have the ability to access. Valuation of these items does not entail a significant amount ofjudgment.

• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quotedprices for identical or similar assets or liabilities in markets that are not active or market data other thanquoted prices that are observable for the assets or liabilities.

• Level 3 measurements are based on unobservable data that are supported by little or no market activity andare significant to the fair value of the assets or liabilities.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween independent and knowledgeable market participants at the measurement date. Therefore, even whenmarket assumptions are not readily available, our own assumptions are set to reflect those that we believe marketparticipants would use in pricing the asset or liability at the measurement date.

The fair value measurement of a financial asset or financial liability must reflect the nonperformance risk of thecounterparty and us. Therefore, the impact of our counterparty’s creditworthiness was considered when in anasset position, and our creditworthiness was considered when in a liability position in the fair value measurementof our financial instruments. Creditworthiness did not have a significant impact on the fair values of our financialinstruments at November 30, 2015 and 2014. Both the counterparties and we are expected to continue to performunder the contractual terms of the instruments. Considerable judgment may be required in interpreting marketdata used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein arenot necessarily indicative of the amounts that could be realized in a current or future market exchange.

Financial Instruments that are not Measured at Fair Value on a Recurring Basis

The carrying values and estimated fair values and basis of valuation of our financial instrument assets andliabilities that are not measured at fair value on a recurring basis were as follows (in millions):

November 30, 2015 November 30, 2014

CarryingValue

Fair Value CarryingValue

Fair Value

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

AssetsCash and cash equivalents (a) . . . . . . $ 647 $647 $ - $ - $ 240 $240 $ - $ -Restricted cash (b) . . . . . . . . . . . . . . 7 7 - - 11 11 - -Long-term other assets (c) . . . . . . . . 119 1 87 31 156 1 103 49

Total . . . . . . . . . . . . . . . . . . . . . . . $ 773 $655 $ 87 $31 $ 407 $252 $ 103 $49

LiabilitiesFixed rate debt (d) . . . . . . . . . . . . . . . $5,193 $ - $5,450 $ - $4,433 $ - $4,743 $ -Floating rate debt (d) . . . . . . . . . . . . 3,594 - 3,589 - 4,655 - 4,562 -

Total . . . . . . . . . . . . . . . . . . . . . . . $8,787 $ - $9,039 $ - $9,088 $ - $9,305 $ -

(a) Cash and cash equivalents are comprised of cash on hand, and at November 30, 2015 also included a moneymarket deposit account and time deposits. Due to their short maturities, the carrying values approximatetheir fair values.

(b) Restricted cash is comprised of a money market deposit account.

(c) At November 30, 2015 and 2014, long-term other assets were substantially all comprised of notes and otherreceivables. The fair values of our Level 1 and Level 2 notes and other receivables were based on estimatedfuture cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notesreceivable were estimated using risk-adjusted discount rates.

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(d) Debt does not include the impact of interest rate swaps. The net difference between the fair value of ourfixed rate debt and its carrying value was due to the market interest rates in existence at November 30, 2015and 2014 being lower than the fixed interest rates on these debt obligations, including the impact of anychanges in our credit ratings. At November 30, 2015 and 2014, the net difference between the fair value ofour floating rate debt and its carrying value was due to the market interest rates in existence atNovember 30, 2015 and November 30, 2014 being slightly higher than the floating interest rates on thesedebt obligations, including the impact of any changes in our credit ratings. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently activeto be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimatedbased on appropriate market interest rates being applied to this debt.

Financial Instruments that are Measured at Fair Value on a Recurring Basis

The estimated fair value and basis of valuation of our financial instrument assets and liabilities that are measuredat fair value on a recurring basis were as follows (in millions):

November 30, 2015 November 30, 2014

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

AssetsCash equivalents (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $748 $ - $ - $ 91 $ - $ -Restricted cash (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 - - 19 - -Marketable securities held in rabbi trusts (c) . . . . . . . . . . . . 105 8 - 113 9 -Derivative financial instruments (d) . . . . . . . . . . . . . . . . . . - 29 - - 14 -Long-term other asset (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 21 - - 20

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $875 $ 37 $21 $223 $ 23 $20

LiabilitiesDerivative financial instruments (d) . . . . . . . . . . . . . . . . . . $ - $625 $ - $ - $278 $ -

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $625 $ - $ - $278 $ -

(a) Cash equivalents are comprised of money market funds.

(b) The majority of restricted cash is comprised of money market funds.

(c) At November 30, 2015 and 2014, marketable securities held in rabbi trusts were comprised of Level 1bonds, frequently-priced mutual funds invested in common stocks, and money market funds and Level 2other investments. Their use is restricted to funding certain deferred compensation and non-qualified U.S.pension plans.

(d) See “Derivative Instruments and Hedging Activities” section below for detailed information regarding ourderivative financial instruments.

(e) Long-term other asset is comprised of an auction-rate security. The fair value was based on a broker quotein an inactive market, which is considered a Level 3 input. During 2015, there were no purchases or salespertaining to this auction-rate security and, accordingly, the change in its fair value was based solely on thestrengthening of the underlying credit.

We measure our derivatives using valuations that are calibrated to the initial trade prices. Subsequent valuationsare based on observable inputs and other variables included in the valuation models such as interest rate, yieldand commodity price curves, forward currency exchange rates, credit spreads, maturity dates, volatilities andnetting arrangements. We use the income approach to value derivatives for foreign currency options andforwards, interest rate swaps and fuel derivatives using observable market data for all significant inputs andstandard valuation techniques to convert future amounts to a single present value amount, assuming thatparticipants are motivated, but not compelled to transact. We also corroborate our fair value estimates usingvaluations provided by our counterparties.

Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis

Sales and Impairments of Ships

In November 2014, we sold the 672-passenger capacity Ocean Princess for a total gain of $24 million, of which$14 million was recognized in the fourth quarter of 2014 as a reduction in other ship operating expenses. Weprovided $66 million of financing to the buyer, which is due in semi-annual installments through November

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2019. Prior to the ship’s delivery in March 2016, we will continue to operate it under a bareboat charteragreement. As a result of the sale-leaseback accounting for this transaction, the remaining gain of $10 million isbeing recognized as a reduction in other ship operating expenses over the term of the bareboat charter agreementthrough March 2016.

In November 2014, we entered into a bareboat charter/sale agreement under which the 1,440-passenger capacityGrand Holiday was chartered to an unrelated entity in January 2015 through March 2025. Under this agreement,ownership of Grand Holiday will be transferred to the buyer in March 2025. This transaction did not meet thecriteria to qualify as a sales-type lease and, accordingly, it was accounted for as an operating lease whereby werecognize the charter revenue over the term of the agreement. As a result of this transaction, we performed a shipimpairment review and recognized a $31 million impairment charge in other ship operating expenses during thefourth quarter of 2014. The estimated fair value of the ship was substantially all determined based on theexpected collectability of the bareboat charter payments, which is considered a Level 3 input.

Due to the expected absorption of Ibero Cruises’ (“Ibero”) operations into Costa in November 2014, and certainship specific facts and circumstances, such as size, age, condition, viable alternative itineraries and historicaloperating cash flows, we performed an undiscounted future cash flow analysis of Ibero’s Grand Celebration asof May 31, 2014 to determine if the ship was impaired. The principal assumptions used in our undiscounted cashflow analysis consisted of forecasted future operating results, including net revenue yields and net cruise costsincluding fuel prices, and the estimated residual value, which are all considered Level 3 inputs, and the thenexpected transfer of Grand Celebration into Costa in November 2014. Based on its undiscounted cash flowanalysis, we determined that the net carrying value for Grand Celebration exceeded its estimated undiscountedfuture cash flows. Accordingly, we then estimated the May 31, 2014 fair value of this ship based on itsdiscounted future cash flows and compared the estimated fair value to its net carrying value. As a result, werecognized a $22 million ship impairment charge in other ship operating expenses during the second quarter of2014.

In December 2014, we entered into a bareboat charter/sale agreement under which the 1,492-passenger capacityCosta Celebration (formerly Grand Celebration) was chartered to an unrelated entity in December 2014 throughAugust 2021. Under this agreement, ownership of Costa Celebration will be transferred to the buyer in August2021. This transaction did not meet the criteria to qualify as a sales-type lease and, accordingly, it is beingaccounted for as an operating lease whereby we recognize the charter revenue over the term of the agreement.

During the third quarter of 2013, we recognized $73 million and $103 million of impairment charges related toCosta Voyager and Costa Classica, respectively. In November 2013, Costa Voyager was taken out-of-service,and during the second quarter of 2014 Costa Voyager was sold and we recognized a $37 million gain as areduction in other ship operating expenses. The estimated fair values of these ships at the time of impairmentwere based on their undiscounted cash flow analyses, which included principal assumptions similar to most ofthose discussed above for Grand Celebration.

We recognized $53 million in 2014 and $176 million in 2013 of ship impairment charges in other ship operatingexpenses.

Valuation of Goodwill and Other Intangibles

The reconciliation of the changes in the carrying amounts of our goodwill, which has been allocated to our NorthAmerica and EAA cruise brands, was as follows (in millions):

North AmericaCruise Brands

EAACruise Brands Total

Balance at November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,898 $1,312 $3,210Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - (83) (83)

Balance at November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,898 1,229 3,127Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - (117) (117)

Balance at November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,898 $1,112 $3,010

At July 31, 2015, all of our cruise brands carried goodwill, except for Seabourn and Fathom. As of that date, weperformed our annual goodwill impairment reviews, which included performing a qualitative assessment forCarnival Cruise Line, Costa, Cunard and P&O Cruises (UK). Qualitative factors such as industry and market

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conditions, macroeconomic conditions, changes to the weighted-average cost of capital (“WACC”), overallfinancial performance, changes in fuel prices and capital expenditures were considered in the qualitativeassessment to determine how changes in these factors would affect each of these cruise brands’ estimated fairvalues. Based on our qualitative assessments, we determined it was more-likely-than-not that each of these cruisebrands’ estimated fair values exceeded their carrying values and, therefore, we did not proceed to the two-stepquantitative goodwill impairment reviews.

As of July 31, 2015, we also performed our annual goodwill impairment reviews of AIDA’s, Holland AmericaLine’s, P&O Cruises (Australia)’s and Princess’ goodwill. We did not perform a qualitative assessment butinstead proceeded directly to step one of the two-step quantitative goodwill impairment review and comparedeach of AIDA’s, Holland America Line’s, P&O Cruises (Australia)’s and Princess’ estimated fair value to thecarrying value of their allocated net assets. Their estimated cruise brand fair value was based on a discountedfuture cash flow analysis. The principal assumptions used in our cash flow analyses consisted of forecastedoperating results, including net revenue yields and net cruise costs including fuel prices; capacity changes,including the expected rotation of vessels into, or out of, Holland America Line, P&O Cruises (Australia) andPrincess; WACC of market participants, adjusted for the risk attributable to the geographic regions in whichAIDA, Holland America Line, P&O Cruises (Australia) and Princess operate; capital expenditures; proceedsfrom forecasted dispositions of ships and terminal values, which are all considered Level 3 inputs. Based on thediscounted cash flow analyses, we determined that each of AIDA’s, Holland America Line’s, P&O Cruises(Australia)’s and Princess’ estimated fair value significantly exceeded their carrying value and, therefore, we didnot proceed to step two of the impairment reviews.

The reconciliation of the changes in the carrying amounts of our intangible assets not subject to amortization,which represent trademarks that have been allocated to our North America and EAA cruise brands, was asfollows (in millions):

North AmericaCruise Brands

EAACruise Brands Total

Balance at November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $927 $359 $1,286Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - (21) (21)

Balance at November 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927 338 1,265Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . - (31) (31)

Balance at November 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $927 $307 $1,234

At July 31, 2015, our cruise brands that have significant trademarks recorded include AIDA, P&O Cruises(Australia), P&O Cruises (UK) and Princess. As of that date, we performed our annual trademark impairmentreviews for these cruise brands, which included performing a qualitative assessment for P&O Cruises (UK).Qualitative factors such as industry and market conditions, macroeconomic conditions, changes to the WACC,changes in royalty rates and overall financial performance were considered in the qualitative assessment todetermine how changes in these factors would affect the estimated fair value for P&O Cruises (UK)’s recordedtrademarks. Based on our qualitative assessment, we determined it was more likely-than-not that the estimatedfair value for P&O Cruises (UK)’s recorded trademarks exceeded their carrying value and, therefore, none ofthese trademarks were impaired.

As of July 31, 2015, we did not perform a qualitative assessment for AIDA’s, P&O Cruises (Australia)’s andPrincess’ trademarks but instead proceeded directly to the quantitative trademark impairment reviews. Ourquantitative assessment included estimating AIDA’s, P&O Cruises (Australia)’s and Princess’ trademarks fairvalue based upon a discounted future cash flow analysis, which estimated the amount of royalties that we arerelieved from having to pay for use of the associated trademarks, based upon forecasted cruise revenues and amarket participant’s royalty rate. The royalty rate was estimated primarily using comparable royalty agreementsfor similar industries. Based on our quantitative assessments, we determined that the estimated fair values forAIDA’s, P&O Cruises (Australia)’s and Princess’ trademarks significantly exceeded their carrying values and,therefore, none of these trademarks were impaired.

The determination of our cruise brand, cruise ship and trademark fair values includes numerous assumptions thatare subject to various risks and uncertainties. We believe that we have made reasonable estimates and judgmentsin determining whether our goodwill, cruise ships and trademarks have been impaired. However, if there is achange in assumptions used or if there is a change in the conditions or circumstances influencing fair values inthe future, then we may need to recognize an impairment charge.

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At November 30, 2015 and 2014, our intangible assets subject to amortization are not significant to ourconsolidated financial statements.

Derivative Instruments and Hedging Activities

We utilize derivative and non-derivative financial instruments, such as foreign currency forwards, options andswaps, foreign currency debt obligations and foreign currency cash balances, to manage our exposure tofluctuations in certain foreign currency exchange rates, and interest rate swaps to manage our interest rateexposure in order to achieve a desired proportion of fixed and floating rate debt. In addition, we utilize our fuelderivatives program to mitigate a portion of the risk to our future cash flows attributable to potential fuel priceincreases, which we define as our “economic risk.” Our policy is to not use any financial instruments for tradingor other speculative purposes.

All derivatives are recorded at fair value. The changes in fair value are recognized currently in earnings if thederivatives do not qualify as effective hedges, or if we do not seek to qualify for hedge accounting treatment,such as for our fuel derivatives. If a derivative is designated as a fair value hedge, then changes in the fair valueof the derivative are offset against the changes in the fair value of the underlying hedged item. If a derivative isdesignated as a cash flow hedge, then the effective portion of the changes in the fair value of the derivative isrecognized as a component of AOCI until the underlying hedged item is recognized in earnings or the forecastedtransaction is no longer probable. If a derivative or a non-derivative financial instrument is designated as a hedgeof our net investment in a foreign operation, then changes in the fair value of the financial instrument arerecognized as a component of AOCI to offset a portion of the change in the translated value of the net investmentbeing hedged, until the investment is sold or substantially liquidated. We formally document hedgingrelationships for all derivative and non-derivative hedges and the underlying hedged items, as well as our riskmanagement objectives and strategies for undertaking the hedge transactions.

We classify the fair values of all our derivative contracts as either current or long-term, depending on whether thematurity date of the derivative contract is within or beyond one year from the balance sheet date. The cash flowsfrom derivatives treated as hedges are classified in our Consolidated Statements of Cash Flows in the samecategory as the item being hedged. Our cash flows related to fuel derivatives are classified within investingactivities.

The estimated fair values of our derivative financial instruments and their location in the Consolidated BalanceSheets were as follows (in millions):

November 30,

Balance Sheet Location 2015 2014

Derivative assetsDerivatives designated as hedging instruments

Net investment hedges (a) . . . . . . . . . . . . . . . . . . . . . . . . . . Prepaid expenses and other $ 14 $ 6Other assets – long-term 13 6

Interest rate swaps (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepaid expenses and other 2 1Other assets – long-term - 1

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29 $ 14

Derivative liabilitiesDerivatives designated as hedging instruments

Interest rate swaps (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued liabilities and other $ 11 $ 13Other long-term liabilities 27 35

Foreign currency zero cost collars (c) . . . . . . . . . . . . . . . . . Accrued liabilities and other - 1Other long-term liabilities 26 -

64 49

Derivatives not designated as hedging instrumentsFuel (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued liabilities and other 227 90

Other long-term liabilities 334 139

561 229

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $625 $278

(a) At November 30, 2015 and 2014, we had foreign currency forwards totaling $43 million and $403 million,respectively, that are designated as hedges of our net investments in foreign operations, which have a euro-

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denominated functional currency. At November 30, 2015, these foreign currency forwards settle throughJuly 2017. At November 30, 2015, we also had foreign currency swaps totaling $387 million that aredesignated as hedges of our net investments in foreign operations, which have a euro-denominatedfunctional currency. At November 30, 2015, these foreign currency swaps settle through September 2019.

(b) We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest ratepayments in exchange for making fixed interest rate payments. These interest rate swap agreementseffectively changed $568 million at November 30, 2015 and $750 million at November 30, 2014 ofEURIBOR-based floating rate euro debt to fixed rate euro debt. These interest rate swaps settle throughMarch 2025. In addition, at November 30, 2015 and 2014 we had U.S. dollar interest rate swaps designatedas fair value hedges whereby we receive fixed interest rate payments in exchange for making floatinginterest rate payments. At November 30, 2015 and 2014, these interest rate swap agreements effectivelychanged $500 million of fixed rate debt to U.S. dollar LIBOR-based floating rate debt. These interest rateswaps settle through February 2016.

(c) At November 30, 2015 and 2014, we had foreign currency derivatives consisting of foreign currency zerocost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominatedshipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding thesederivatives.

(d) At November 30, 2015 and 2014, we had fuel derivatives consisting of zero cost collars on Brent crude oil(“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” belowfor additional information regarding these fuel derivatives.

Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of ourderivative assets and liabilities within counterparties. The amounts recognized within assets and liabilities wereas follows (in millions):

November 30, 2015

Gross Amounts

Gross AmountsOffset in the

Balance Sheet

Total Net AmountsPresented in theBalance Sheet

Gross Amountsnot Offset in theBalance Sheet

NetAmounts

Assets . . . . . . . . . . . . . . . . . . . . . . . . $ 73 $(44) $ 29 $(29) $ -Liabilities . . . . . . . . . . . . . . . . . . . . . $669 $(44) $625 $(29) $596

November 30, 2014

Gross Amounts

Gross AmountsOffset in the

Balance Sheet

Total Net AmountsPresented in theBalance Sheet

Gross Amountsnot Offset in theBalance Sheet

NetAmounts

Assets . . . . . . . . . . . . . . . . . . . . . . . . $ 78 $(64) $ 14 $(14) $ -Liabilities . . . . . . . . . . . . . . . . . . . . . $342 $(64) $278 $(14) $264

The effective portions of our derivatives qualifying and designated as hedging instruments recognized in othercomprehensive (loss) income were as follows (in millions):

November 30,

2015 2014 2013

Net investment hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58 $ 25 $(11)Foreign currency zero cost collars – cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(57) $(10) $ (1)Interest rate swaps – cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $(28) $ 2

There are no credit risk related contingent features in our derivative agreements, except for bilateral creditprovisions within our fuel derivative counterparty agreements. These provisions require interest-bearing, non-restricted cash to be posted or received as collateral to the extent the fuel derivative fair value payable to orreceivable from an individual counterparty exceeds $100 million. At November 30, 2015, we had $25 million ofcollateral posted to one of our fuel derivative counterparties. Subsequent to November 30, 2015, we wererequired to post an additional $22 million of collateral. At November 30, 2015, no collateral was required to bereceived from our fuel derivative counterparties. At November 30, 2014, no collateral was required to be postedto or received from our fuel derivative counterparties.

The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified toearnings in the next twelve months is not significant. We have not provided additional disclosures of the impact

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that derivative instruments and hedging activities have on our consolidated financial statements as ofNovember 30, 2015 and 2014 and for the years ended November 30, 2015, 2014 and 2013 where such impactswere not significant.

Fuel Price Risks

Our exposure to market risk for changes in fuel prices substantially all relates to the consumption of fuel on ourships. We use our fuel derivatives program to mitigate a portion of our economic risk attributable to potentialfuel price increases. We designed our fuel derivatives program to maximize operational flexibility by utilizingderivative markets with significant trading liquidity and our program currently consists of zero cost collars onBrent.

All of our derivatives are based on Brent prices whereas the actual fuel used on our ships is marine fuel. Changesin the Brent prices may not show a high degree of correlation with changes in our underlying marine fuel prices.We will not realize any economic gain or loss upon the monthly maturities of our zero cost collars unless theaverage monthly price of Brent is above the ceiling price or below the floor price. We believe that thesederivatives will act as economic hedges; however, hedge accounting is not applied. As part of our fuel derivativesprogram, we will continue to evaluate various derivative products and strategies.

Our unrealized and realized (losses) gains, net on fuel derivatives were as follows (in millions):

November 30,

2015 2014 2013

Unrealized (losses) gains on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(332) $(268) $36Realized losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244) (3) -

(Losses) gains on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(576) $(271) $36

At November 30, 2015, our outstanding fuel derivatives consisted of zero cost collars on Brent as follows:

Maturities (a)Transaction

DatesBarrels

(in thousands)Weighted-Average

Floor PricesWeighted-Average

Ceiling Prices

Fiscal 2016June 2012 . . . . . . . . . . . . . . . . . . . . . . . . 3,564 $75 $108February 2013 . . . . . . . . . . . . . . . . . . . . 2,160 $80 $120April 2013 . . . . . . . . . . . . . . . . . . . . . . . 3,000 $75 $115

8,724

Fiscal 2017February 2013 . . . . . . . . . . . . . . . . . . . . 3,276 $80 $115April 2013 . . . . . . . . . . . . . . . . . . . . . . . 2,028 $75 $110January 2014 . . . . . . . . . . . . . . . . . . . . . 1,800 $75 $114October 2014 . . . . . . . . . . . . . . . . . . . . . 1,020 $80 $113

8,124

Fiscal 2018January 2014 . . . . . . . . . . . . . . . . . . . . . 2,700 $75 $110October 2014 . . . . . . . . . . . . . . . . . . . . . 3,000 $80 $114

5,700

(a) Fuel derivatives mature evenly over each month within the above fiscal periods.

Foreign Currency Exchange Rate Risks

Overall Strategy

We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating andfinancing activities, including netting certain exposures to take advantage of any natural offsets and, whenconsidered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focusis to manage the economic foreign currency exchange risks faced by our operations, which are the ultimateforeign currency exchange risks that would be realized by us if we exchanged one currency for another, and notaccounting risks. While we will continue to monitor our exposure to these economic risks, we do not currently

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hedge our foreign currency exchange risks with derivative or non-derivative financial instruments, with theexception of certain of our ship commitments and net investments in foreign operations. The financial impacts ofthe hedging instruments we do employ generally offset the changes in the underlying exposures being hedged.

Operational Currency Risks

Our European and Australian cruise brands generate significant revenues and incur significant expenses in theireuro, sterling or Australian dollar functional currency, which subjects us to “foreign currency translational” riskrelated to these currencies. Accordingly, exchange rate fluctuations of the euro, sterling and Australian dollaragainst the U.S. dollar will affect our reported financial results since the reporting currency for our consolidatedfinancial statements is the U.S. dollar. Any strengthening of the U.S. dollar against these foreign currencies hasthe financial statement effect of decreasing the U.S. dollar values reported for these cruise brands’ revenues andexpenses. Any weakening of the U.S. dollar has the opposite effect.

Substantially all of our brands also have non-functional currency risk related to their international salesoperations, which has become an increasingly larger part of most of their businesses over time, and principallyincludes the euro, sterling and Australian, Canadian and U.S. dollars. In addition, all of our brands have non-functional currency expenses for a portion of their operating expenses. Accordingly, we also have “foreigncurrency transactional” risks related to changes in the exchange rates for our brands’ revenues and expenses thatare in a currency other than their functional currency. However, these brands’ revenues and expenses in non-functional currencies create some degree of natural offset from these currency exchange movements.

Investment Currency Risks

We consider our investments in foreign operations to be denominated in relatively stable currencies and of along-term nature. We partially mitigate our net investment currency exposures by denominating a portion of ourforeign currency intercompany payables in our foreign operations’ functional currencies, substantially allsterling. We have designated $2.6 billion as of November 30, 2015 and $2.4 billion as of November 30, 2014 ofour foreign currency intercompany payables as non-derivative hedges of our net investments in foreignoperations. Accordingly, we have included $509 million at November 30, 2015 and $359 million atNovember 30, 2014 of cumulative foreign currency transaction non-derivative gains in the cumulative translationadjustment component of AOCI, which offsets a portion of the losses recorded in AOCI upon translating ourforeign operations’ net assets into U.S. dollars. We recognized foreign currency non-derivative transaction gains(losses) of $150 million in 2015, $125 million in 2014 and $(9) million in 2013 in the cumulative translationadjustment component of AOCI.

Newbuild Currency Risks

Our shipbuilding contracts are typically denominated in euros. Our decisions regarding whether or not to hedge anon-functional currency ship commitment for our cruise brands are made on a case-by-case basis, taking intoconsideration the amount and duration of the exposure, market volatility, economic trends, our overall expectednet cash flows by currency and other offsetting risks. We use foreign currency derivative contracts and have usednon-derivative financial instruments to manage foreign currency exchange rate risk for some of our shipconstruction payments.

In January 2015, we entered into foreign currency zero cost collars that are designated as cash flow hedges for aportion of Majestic Princess’ and Seabourn Encore’s newbuilds’ euro-denominated shipyard payments. TheMajestic Princess’ collars mature in March 2017 at a weighted-average ceiling of $590 million and a weighted-average floor of $504 million. The Seabourn Encore’s collars mature in November 2016 at a weighted-averageceiling of $221 million and a weighted-average floor of $185 million. If the spot rate is between the weighted-average ceiling and floor rates on the date of maturity, then we would not owe or receive any payments underthese collars.

In February 2015, we settled our foreign currency zero cost collars that were designated as cash flow hedges forthe final euro-denominated shipyard payments of P&O Cruises (UK)’s Britannia, which resulted in $33 millionbeing recognized in other comprehensive loss during 2015.

At January 22, 2016, our remaining newbuild currency exchange rate risk relates to euro-denominated newbuildcontract payments, which represent a total unhedged commitment of $2.0 billion and substantially relates toCarnival Cruise Line, Holland America Line, P&O Cruises (Australia) and Seabourn newbuilds scheduled to bedelivered through 2019.

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The cost of shipbuilding orders that we may place in the future that is denominated in a different currency thanour cruise brands’ or the shipyards’ functional currency is expected to be affected by foreign currency exchangerate fluctuations. These foreign currency exchange rate fluctuations may affect our desire to order new cruiseships.

Interest Rate Risks

We manage our exposure to fluctuations in interest rates through our debt portfolio management and investmentstrategies. We evaluate our debt portfolio to determine whether to make periodic adjustments to the mix of fixedand floating rate debt through the use of interest rate swaps and the issuance of new debt or the early retirementof existing debt. At November 30, 2015, 60% and 40% (52% and 48% at November 30, 2014) of our debt borefixed and floating interest rates, respectively, including the effect of interest rate swaps. In addition, to the extentthat we have excess cash available for investment, we purchase high quality short-term investments with floatinginterest rates, which offset a portion of the impact of interest rate fluctuations arising from our floating interestrate debt portfolio.

Concentrations of Credit Risk

As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial andother institutions with which we conduct significant business. Our maximum exposure under foreign currencyand fuel derivative contracts and interest rate swap agreements that are in-the-money, which were not material atNovember 30, 2015, is the replacement cost, net of any collateral received or contractually allowed offset, in theevent of nonperformance by the counterparties to the contracts, all of which are currently our lending banks. Weseek to minimize these credit risk exposures, including counterparty nonperformance primarily associated withour cash equivalents, investments, committed financing facilities, contingent obligations, derivative instruments,insurance contracts and new ship progress payment guarantees, by normally conducting business with large,well-established financial institutions, insurance companies and export credit agencies, and by diversifying ourcounterparties. In addition, we have guidelines regarding credit ratings and investment maturities that we followto help safeguard liquidity and minimize risk. We normally do require collateral and/or guarantees to supportnotes receivable on significant asset sales, long-term ship charters and new ship progress payments toshipyards. We currently believe the risk of nonperformance by any of these significant counterparties is remote.

We also monitor the creditworthiness of travel agencies and tour operators in Asia, Australia and Europe andcredit and debit card providers to which we extend credit in the normal course of our business, which includescharter-hire agreements in Asia prior to sailing. Our credit exposure also includes contingent obligations relatedto cash payments received directly by travel agents and tour operators for cash collected by them on cruise salesin Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them totheir travel agents and tour operators regardless of whether we have received these payments. Concentrations ofcredit risk associated with these trade receivables, charter-hire agreements and contingent obligations are notconsidered to be material, principally due to the large number of unrelated accounts within our customer base,the nature of these contingent obligations and their short maturities. We have experienced only minimal creditlosses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally requirecollateral or other security to support normal credit sales.

NOTE 12 – Segment Information

We have three reportable cruise segments that are comprised of our (1) North America cruise brands, (2) EAAcruise brands and (3) Cruise Support. In addition, we have a Tour and Other segment. Our segments are reportedon the same basis as the internally reported information that is provided to our chief operating decision maker(“CODM”), who is the President and Chief Executive Officer of Carnival Corporation and Carnival plc.Decisions to allocate resources and assess performance for Carnival Corporation & plc are made by the CODMupon review of the segment results across all of our cruise brands and other segments.

Our North America cruise segment includes Carnival Cruise Line, Holland America Line, Princess andSeabourn. Our EAA cruise segment includes AIDA, Costa, Cunard, P&O Cruises (Australia), P&O Cruises (UK)and prior to November 2014, Ibero. These individual cruise brand operating segments have been aggregated intotwo reportable segments based on the similarity of their economic and other characteristics, including types ofcustomers, regulatory environment, maintenance requirements, supporting systems and processes and productsand services they provide. Our Cruise Support segment represents certain of our port and related facilities andother services that are provided for the benefit of our cruise brands and Fathom’s pre-launch selling, general andadministrative expenses.

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Our Tour and Other segment represents the hotel and transportation operations of Holland America PrincessAlaska Tours. In 2014, our Tour and Other segment also included one ship that we chartered to an unaffiliatedentity. In November 2014, we entered into a bareboat charter/sale agreement under which Grand Holiday waschartered to an unrelated entity in January 2015 through March 2025. Additionally, in December 2014, weentered into a bareboat charter/sale agreement under which Costa Celebration was chartered to an unrelatedentity in December 2014 through August 2021. Under these agreements, ownership of Grand Holiday and CostaCelebration will be transferred to the buyer at the end of their lease term. Neither of these transactions met thecriteria to qualify as a sales-type lease and, accordingly, they are being accounted for as operating leases wherebywe recognize the charter revenue over the term of the agreements. Subsequent to entering into these agreements,our Tour and Other segment includes these three ships. The significant accounting policies of our segments arethe same as those described in Note 2 – “Summary of Significant Accounting Policies.”

Selected information for our segments as of and for the years ended November 30 was as follows (in millions):

Revenues

Operatingcosts andexpenses

Sellingand

administrative

Depreciationand

amortizationOperating

income (loss)Capital

expendituresTotalassets

2015North America Cruise Brands (a) . . . . . . . . . . $ 9,866 $ 5,925 $1,140 $ 994 $1,807 $ 854 $22,420EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . 5,636 3,442 695 561 938 1,265 14,076Cruise Support . . . . . . . . . . . . . . . . . . . . . . . . . 119 58 223 27 (189) 162 2,248Tour and Other (a) . . . . . . . . . . . . . . . . . . . . . . 226 155 9 44 18 13 493 (b)Intersegment elimination (a) . . . . . . . . . . . . . . (133) (133) - - - - -

$15,714 $ 9,447 $2,067 $1,626 $2,574 $2,294 $39,237

2014North America Cruise Brands (a) (c) . . . . . . . . $ 9,559 $ 6,436 $1,121 $ 961 $1,041 $1,315 $22,681EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . 6,148 3,914 725 616 893 1,054 15,228Cruise Support . . . . . . . . . . . . . . . . . . . . . . . . . 90 39 200 25 (174) 156 1,023Tour and Other (a) . . . . . . . . . . . . . . . . . . . . . . 215 160 8 35 12 58 516 (b)Intersegment elimination (a) . . . . . . . . . . . . . . (128) (128) - - - - -

$15,884 $10,421 $2,054 $1,637 $1,772 $2,583 $39,448

2013North America Cruise Brands (a) (c) . . . . . . . . $ 9,370 $ 6,460 $1,048 $ 929 $ 933 $1,350 $22,386EAA Cruise Brands . . . . . . . . . . . . . . . . . . . . . 5,906 4,137 686 599 471 (d) 642 16,126Cruise Support . . . . . . . . . . . . . . . . . . . . . . . . . 96 31 136 26 (97) 108 1,016Tour and Other (a) . . . . . . . . . . . . . . . . . . . . . . 210 143 9 36 22 49 514 (b)Intersegment elimination (a) . . . . . . . . . . . . . . (126) (126) - - - - -

$15,456 $10,645 $1,879 $1,590 $1,329 $2,149 $40,042

(a) A portion of the North America cruise brands’ segment revenues includes revenues for the tour portion of acruise when a land tour package is sold along with a cruise by either Holland America Line or Princess.These intersegment tour revenues, which are included in our Tour and Other segment, are eliminateddirectly against the North America cruise brands’ segment revenues and operating expenses in the line“Intersegment elimination.”

(b) Tour and Other segment assets primarily include hotels and lodges in the state of Alaska and the CanadianYukon, motorcoaches used for sightseeing and charters, glass-domed railcars, which run on the AlaskaRailroad, and our owned ships that we leased out under long-term charters to unaffiliated entities.

(c) Previously reported results changed as a result of our revision of prior period financial statements as follows(see “Note 1 – General – Revision of Prior Period Financial Statements”):

November 30, 2014 November 30, 2013

AsPreviouslyReported Adjustment

AsRevised

AsPreviouslyReported Adjustment

AsRevised

North America Cruise BrandsOperating costs and expenses . . . . . . . . . . . . $ 6,418 $ 18 $ 6,436 $ 6,439 $ 21 $ 6,460Depreciation and amortization . . . . . . . . . . . $ 959 $ 2 $ 961 $ 927 $ 2 $ 929Operating income . . . . . . . . . . . . . . . . . . . . . $ 1,061 $(20) $ 1,041 $ 956 $(23) $ 933Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $22,765 $(84) $22,681 $22,448 $(62) $22,386

(d) Includes $13 million in 2013 of impairment charges related to Ibero’s trademarks.

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Non-U.S. revenues for our cruise brands represent sales generated from outside the U.S. principally by non-U.S.travel agents and tour operators. Substantially all of our long-lived assets are located outside of the U.S. andconsist of our ships and ships under construction.

Revenues by geographic areas, which are based on where our guests are sourced and not the cruise brands onwhich they sailed, were as follows (in millions):

Years Ended November 30,

2015 2014 2013

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,015 $ 7,762 $ 7,738Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,133 5,676 5,426Australia and Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,256 2,097 1,772Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 349 520

$15,714 $15,884 $15,456

NOTE 13 – Compensation Plans

Equity Plans

We issue our share-based compensation awards under the Carnival Corporation and Carnival plc stock plans,which have an aggregate of 18.3 million shares available for future grant at November 30, 2015. These plansallow us to issue time-based share (“TBS”) awards (which include restricted stock awards (“RSAs”) andrestricted stock units (“RSUs”)), performance-based share (“PBS”) awards, market-based share (“MBS”) awardsand stock options (collectively “equity awards”). Equity awards are principally granted to management levelemployees and members of our Boards of Directors. The plans are administered by a committee of ourindependent directors (the “Committee”) that determines which employees are eligible to participate, themonetary value or number of shares for which equity awards are to be granted and the amounts that may beexercised or sold within a specified term. These plans allow us to fulfill our equity award obligations usingshares purchased in the open market or with unissued or treasury shares. Certain equity awards provide foraccelerated vesting if we have a change in control, as defined.

Our total share-based compensation expense was $55 million in 2015, $52 million in 2014 and $42 million in2013 of which $51 million in 2015, $48 million in 2014 and $39 million in 2013 has been included in selling andadministrative expenses and $4 million in both 2015 and 2014 and $3 million in 2013 in cruise payroll andrelated expenses.

TBS, PBS and MBS Awards

RSAs generally have the same rights as Carnival Corporation common stock, except for transfer restrictions andforfeiture provisions. RSAs have been granted to certain officers and non-executive board members and vest atthe end of three years, except for shares released from restriction to satisfy retirement eligible tax obligations(“tax release shares”). In addition, Carnival Corporation and Carnival plc grant RSUs, which also vest at the endof three years, except for tax release shares, and accrue forfeitable dividend equivalents on each outstandingRSU, in the form of additional RSUs, based on dividends declared. The share-based compensation expense forTBS awards is based on the quoted market price of the Carnival Corporation or Carnival plc shares on the date ofgrant.

In 2015, 2014 and 2013, the Committee approved PBS awards to be granted to certain key CarnivalCorporation & plc executives. The share-based compensation expense for these PBS awards is based on thequoted market price of the Carnival Corporation or Carnival plc shares and expected total shareholder return rankrelative to certain peer companies on the date of grant and the probability of our annual earnings target for eachyear over a three-year period being achieved. Our 2015 and 2014 PBS awards also have a return on investedcapital (“ROIC”) target. The PBS awards granted provide an opportunity to earn from zero to 200% in 2015 and2014 and zero to 187.5% in 2013 of the number of target shares underlying the award achieved for each yearover a three-year period.

In 2014 and 2013, the Committee approved MBS awards to be granted to certain senior executives. The MBSawards granted in 2014 and 2013 were valued at $13 million and $4 million, respectively, as of the date of grant.The share-based compensation expense for all of the MBS awards were based on the quoted market prices of theCarnival Corporation common stock or the Carnival plc ordinary shares on the date of grant and the probability

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of certain market conditions being achieved. One-half of all of the MBS awards are expensed evenly over athree-year period and the remaining half are expensed evenly over a four-year period. There were no MBSawards granted in 2015.

During the year ended November 30, 2015, TBS, PBS and MBS award activity was as follows:

TBS Awards PBS Awards MBS Awards

Shares

Weighted-Average

Grant Date FairValue Shares

Weighted-Average

Grant Date FairValue Shares

Weighted-Average

Grant Date FairValue

Outstanding at November 30, 2014 . . 3,210,050 $36.30 572,787 $34.82 270,220 $64.11Granted . . . . . . . . . . . . . . . . . . . . . . . . 1,064,060 $45.38 188,990 $47.47 - $ -Vested . . . . . . . . . . . . . . . . . . . . . . . . . (1,296,378) $31.35 (1,940) $34.13 - $ -Forfeited . . . . . . . . . . . . . . . . . . . . . . . (183,262) $41.46 (186,651) $32.48 (28,481) $72.60

Outstanding at November 30, 2015 . . 2,794,470 $41.72 573,186 $39.75 241,739 $63.11

The total grant date fair value of TBS, PBS and MBS awards vested was $41 million in both 2015 and 2014 and$42 million in 2013. As of November 30, 2015, there was $55 million of total unrecognized compensation costrelated to TBS, PBS and MBS awards. As of November 30, 2015, the total unrecognized compensation costsrelated to TBS, PBS and MBS awards are expected to be recognized over a weighted-average period of 0.9, 0.8and 1.0 years, respectively.

Stock Option Plans

In 2007 and 2008, the Committee decided to cease granting stock options to our employees and non-executiveboard members, respectively, and to instead grant them TBS awards. A combined summary of CarnivalCorporation and Carnival plc stock option activity during the year ended November 30, 2015 related to stockoptions previously granted was as follows:

SharesWeighted-Average

Exercise Price

Weighted-Average

RemainingContractual

Term

AggregateIntrinsic

Value (a)

(in years) (in millions)

Outstanding at November 30, 2014 . . . . . . . . . . . . . . . . 1,059,256 $51.36Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (190,690) $46.49Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . (833,566) $52.63

Outstanding and exercisable at November 30, 2015 . . . 35,000 $47.83 0.9 $ -

(a) The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds theoption exercise price at November 30, 2015.

As of the dates of exercise, there was a nominal intrinsic value of options exercised in 2015 and 2014 and $3million in 2013. As of November 30, 2015, there is no unrecognized compensation cost as there were nounvested stock options. Our stock options will expire in 2016.

Defined Benefit Pension Plans

We have several single-employer defined benefit pension plans, which cover some of our shipboard andshoreside employees. The U.S. and UK shoreside employee plans are closed to new membership and are fundedat or above the level required by U.S. or UK regulations. Substantially all of the remaining defined benefit plansare unfunded. In determining all of our plans’ benefit obligations at November 30, 2015 and 2014, we assumed aweighted-average discount rate of 3.5% for both years. The net asset or net liability positions under these single-employer defined benefit pension plans are not material.

In addition, we participate in two multiemployer defined benefit pension plans in the UK, the British MerchantNavy Officers Pension Fund (registration number 10005645) (“MNOPF”), and the British Merchant NavyRatings Pension Fund (registration number 10005646) (“MNRPF”), which are referred to as “the multiemployerplans.” The MNOPF is divided into two sections, the “New Section” and the “Old Section.” The multiemployer

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plans are maintained for the benefit of the employees of the participating employers who make contributions tothe plans. However, contributions made by employers, including us, may be used to provide benefits toemployees of other participating employers, and if any of the participating employers withdraw from themultiemployer plans or fail to make their required contributions, any unfunded obligations would be theresponsibility of the remaining participating employers. We are contractually obligated to make all requiredcontributions as determined by the plans’ trustees. All of our multiemployer plans are closed to new membership,and the MNOPF Old Section is also closed to further benefit accrual and is fully funded. Based on the mostrecent actuarial reviews at March 31, 2014 of the MNOPF New Section and the MNRPF, it was determined thatthese plans were 87% and 67% funded, respectively. The multiemployer plans have implemented recovery plans,as appropriate, whereby their estimated funding deficits are to be recovered through funding contributions fromparticipating employers.

We expense our portion of the MNOPF deficit as amounts are invoiced by, and become due and payable to, thetrustees. In 2015 and 2014, our contributions to the MNOPF fund were not material and did not exceed 5% oftotal contributions to the fund. In 2013, we received and paid in full a special assessment invoice from theMNOPF trustee for our additional share of the MNOPF New Section deficit. Accordingly, we expensed theinvoice of $15 million in cruise payroll and related expense in 2013, which exceeded 5% of total contributions tothe fund. In addition, we accrue and expense our portion of the MNRPF deficit based on our estimated probableobligation from the most recent actuarial review. We expensed a nominal amount in 2015 and $18 million in2014 of our estimated probable obligation relating to our allocated share of the MNRPF deficit in cruise payrolland related expenses. As of November 30, 2015, we had no remaining estimated obligation of the MNRPF deficitafter contributing $14.3 million in 2015. In 2015 and 2014, our contributions to the MNRPF exceeded 5% oftotal contributions to the fund. In 2013, our contributions to the MNRPF were not material and did not exceed5% of total contributions to the fund. It is possible that we will be required to fund and expense additionalamounts for the multiemployer plans in the future, however, such amounts are not expected to be material to ourconsolidated financial statements.

Total expense for all defined benefit pension plans, including the multiemployer plans, was $47 million in 2015,$69 million in 2014 and $62 million in 2013.

Defined Contribution Plans

We have several defined contribution plans available to most of our employees. We contribute to these plansbased on employee contributions, salary levels and length of service. Total expense for these plans was $30million in 2015 and $25 million in both 2014 and 2013.

NOTE 14 – Earnings Per Share

Our basic and diluted earnings per share were computed as follows (in millions, except per share data):

Years Ended November 30,

2015 2014 2013

Net income for basic and diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,757 $1,216 $1,055

Weighted-average common and ordinary shares outstanding . . . . . . . . . . . . . . . . . . . . . 777 776 775Dilutive effect of equity plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2

Diluted weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 778 777

Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.57 $ 1.36

Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56 $ 1.36

Anti-dilutive equity awards excluded from diluted earnings per share computations . . . - 1 4

NOTE 15 – Supplemental Cash Flow Information

Cash paid for interest, net of capitalized interest, was $216 million in 2015, $297 million in 2014 and $301million in 2013. In addition, cash paid for income taxes, net of recoveries, was $40 million in 2015, $5 million in2014 and $4 million in 2013.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financialreporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Under the supervisionand with the participation of our management, including our President and Chief Executive Officer and our ChiefFinancial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reportingbased on the 2013 Internal Control – Integrated Framework, issued by the Committee of SponsoringOrganizations of the Treadway Commission (“COSO Framework”). Based on our evaluation under the COSOFramework, our management concluded that our internal control over financial reporting was effective as ofNovember 30, 2015.

PricewaterhouseCoopers LLP, the independent registered certified public accounting firm that audited ourconsolidated financial statements, has also audited the effectiveness of our internal control over financialreporting as of November 30, 2015 as stated in their report, which is included in this 2015 Annual Report.

Arnold W. Donald David BernsteinPresident and Chief Executive OfficerJanuary 29, 2016

Chief Financial OfficerJanuary 29, 2016

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

To the Boards of Directors and Shareholders of Carnival Corporation and Carnival plc:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income,comprehensive income, cash flows and shareholders’ equity present fairly, in all material respects, the financialposition of Carnival Corporation & plc (comprising Carnival Corporation and Carnival plc and their respectivesubsidiaries, the “Company”) at November 30, 2015 and November 30, 2014, and the results of their operationsand their cash flows for each of the three years in the period ended November 30, 2015 in conformity withaccounting principles generally accepted in the United States of America. Also in our opinion, the Companymaintained, in all material respects, effective internal control over financial reporting as of November 30, 2015,based on criteria established in the 2013 Internal Control – Integrated Framework, issued by the Committee ofSponsoring Organizations of the Treadway Commission (“COSO Framework”). The Company’s management isresponsible for these financial statements, for maintaining effective internal control over financial reporting andfor its assessment of the effectiveness of internal control over financial reporting, included in Management’sReport on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financialstatements and on the Company’s internal control over financial reporting based on our integrated audits. Weconducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audits to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement and whether effective internal control overfinancial reporting was maintained in all material respects. Our audits of the financial statements includedexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessingthe accounting principles used and significant estimates made by management, and evaluating the overallfinancial statement presentation. Our audit of internal control over financial reporting included obtaining anunderstanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Ouraudits also included performing such other procedures as we considered necessary in the circumstances. Webelieve that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reportingincludes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk thatcontrols may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

Miami, FloridaJanuary 29, 2016

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this 2015 Annual Report are “forward-lookingstatements” that involve risks, uncertainties and assumptions with respect to us, including some statementsconcerning future results, outlooks, plans, goals and other events which have not yet occurred. These statementsare intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical factsare statements that could be deemed forward-looking. These statements are based on current expectations,estimates, forecasts and projections about our business and the industry in which we operate and the beliefs andassumptions of our management. We have tried, whenever possible, to identify these statements by using wordslike “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “anticipate,” “forecast,”“project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate” and similar expressions of future intent orthe negative of such terms.

Forward-looking statements include those statements that may impact, among other things, the forecasting of ouradjusted earnings per share; net revenue yields; booking levels; pricing; occupancy; operating, financing and taxcosts, including fuel expenses; net cruise costs per available lower berth day; estimates of ship depreciable livesand residual values; liquidity; goodwill, ship and trademark fair values and outlook. Because forward-lookingstatements involve risks and uncertainties, there are many factors that could cause our actual results, performanceor achievements to differ materially from those expressed or implied in this 2015 Annual Report. This notecontains important cautionary statements of the known factors that we consider could materially affect theaccuracy of our forward-looking statements and adversely affect our business, results of operations and financialposition. It is not possible to predict or identify all such risks. There may be additional risks that we considerimmaterial or which are unknown. These factors include, but are not limited to, the following:

– Incidents, such as ship incidents, security incidents, the spread of contagious diseases and threats thereof,adverse weather conditions or other natural disasters and the related adverse publicity affecting ourreputation and the health, safety, security and satisfaction of guests and crew;

– Economic conditions and adverse world events affecting the safety and security of travel, such as civilunrest, armed conflicts and terrorist attacks;

– Changes in and compliance with laws and regulations relating to environment, health, safety, security, taxand anti-corruption under which we operate;

– Disruptions and other damages to our information technology and other networks and operations, andbreaches in data security;

– Ability to recruit, develop and retain qualified personnel;– Increases in fuel prices;– Fluctuations in foreign currency exchange rates;– Misallocation of capital among our ship, joint venture and other strategic investments;– Future operating cash flow may not be sufficient to fund future obligations and we may be unable to obtain

financing;– Deterioration of our cruise brands’ strengths and our inability to implement our strategies;– Continuing financial viability of our travel agent distribution system, air service providers and other key

vendors in our supply chain and reductions in the availability of, and increases in the prices for, the servicesand products provided by these vendors;

– Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments onterms that are favorable or consistent with our expectations and increases to our repairs and maintenanceexpenses and refurbishment costs as our fleet ages;

– Failure to keep pace with developments in technology;– Geographic regions in which we try to expand our business may be slow to develop and ultimately not

develop how we expect and our international operations are subject to additional risks not generallyapplicable to our U.S. operations;

– Competition from and overcapacity in the cruise ship and land-based vacation industry;– Economic, market and political factors that are beyond our control, which could increase our operating,

financing and other costs;– Litigation, enforcement actions, fines or penalties;– Lack of continuing availability of attractive, convenient and safe port destinations on terms that are

favorable or consistent with our expectations;– Union disputes and other employee relationship issues;

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– Decisions to self-insure against various risks or the inability to obtain insurance for certain risks atreasonable rates;

– Reliance on third-party providers of various services integral to the operations of our business;– Business activities that involve our co-investment with third parties;– Disruptions in the global financial markets or other events that may negatively affect the ability of our

counterparties and others to perform their obligations to us;– Our shareholders may be subject to the uncertainties of a foreign legal system since Carnival Corporation

and Carnival plc are not U.S. corporations;– Small group of shareholders may be able to effectively control the outcome of shareholder voting;– Provisions in Carnival Corporation’s and Carnival plc’s constitutional documents may prevent or discourage

takeovers and business combinations that our shareholders might consider to be in their best interests and– The DLC arrangement involves risks not associated with the more common ways of combining the

operations of two companies.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuingobligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation todisseminate, after the date of this 2015 Annual Report, any updates or revisions to any such forward-lookingstatements to reflect any change in expectations or events, conditions or circumstances on which any suchstatements are based.

2015 Executive Overview

Overall, 2015 was a great year for us as we continued to improve earnings with over 40% growth driven byhigher cruise ticket pricing and onboard spending and lower fuel prices, despite the unfavorable foreign currencyimpact and macroeconomic and geopolitical challenges. We also achieved a ROIC at November 30, 2015 ofnearly 7.5%, which is up from approximately 4.5% two years ago, as we move towards our goal of double digitROIC in the next two to three years, while maintaining a strong balance sheet (we define ROIC as the twelve-month adjusted earnings before interest divided by the monthly average of debt plus equity minus construction-in-progress).

Net income for 2015 increased 44% to $1.8 billion from $1.2 billion for 2014 (diluted earnings per share was$2.26 in 2015 compared to $1.56 in 2014). The increase in our net income for 2015 was driven primarily by thefollowing:

– Increases in cruise ticket pricing, driven primarily by improvements in Alaskan and Caribbean itineraries forour North America brands and Mediterranean and North European itineraries for our EAA brands, mostlyoffset by the net unfavorable foreign currency transactional impact;

– Higher onboard spending by our guests on both sides of the Atlantic and– Lower fuel prices, partially offset from losses on fuel derivatives.

These increases to 2015 net income were partially offset by the unfavorable foreign currency translational impactand higher dry-dock expenses resulting from a higher number of dry-dock days in 2015 compared to 2014.

Our key Non-GAAP performance financial measures for 2015 were as follows (see “Key Performance Non-GAAP Financial Indicators”):

– Adjusted net income increased 40% to $2.1 billion from $1.5 billion for 2014 (adjusted diluted earnings pershare in 2015 was $2.70 compared to $1.93 in 2014);

– Net revenue yields on a constant currency basis increased 4.3%, comprised of a 3.8% increase in netpassenger ticket revenue yields and a 5.9% increase in net onboard and other revenue yields and

– Net cruise costs excluding fuel per ALBD (“available lower berth day”) on a constant currency basisincreased 3.5%.

Our ability to generate significant operating cash flows allows us to internally fund our capital investments. Inaddition, we are committed to returning “free cash flows” (defined as cash flows from operations less investingactivities) to our shareholders in the form of dividends and/or share buybacks. In 2015, we generated over $4.5billion of cash from operations, 33% higher than last year, and used $2.5 billion to fund investing activities,leaving us with $2.1 billion, the majority of which has been returned to our shareholders through our regularquarterly dividends and share buybacks. In addition, we increased our quarterly dividend by 20% to $0.30 pershare from $0.25 per share and repurchased $276 million of our shares under the Repurchase Program.

We continue to identify and implement new strategies and tactics to strengthen our cruise ticket revenuemanagement processes and systems across our portfolio of brands, such as optimizing our pricing methodologies

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and improving our pricing models. In addition, we are in the process of developing a state-of-the-art revenuemanagement system that will ultimately enable our brands to further optimize pricing and inventory. We are alsoimplementing new initiatives to better coordinate and optimize our brands’ global deployment strategies tomaximize guest satisfaction and itinerary profits. Further, we are implementing initiatives to strengthen ouronboard revenue programs. Finally, we added a new port facility, Amber Cove in Puerto Plata, DominicanRepublic, strategically located in the central Caribbean.

We also continue to implement initiatives to create additional demand for our brands, ultimately leading tohigher revenue yields. This includes increasing consumer awareness and consideration of our cruise brands andthe global cruise industry through coordinated media communication, expanded trade-show presence andadvertising.

Our goal is to consistently exceed our guests’ expectations while providing them with a wide variety ofexceptional vacation experiences. We believe that we can achieve this goal by continually focusing our efforts onhelping our guests choose the cruise brand that will meet their unique needs and desires, improving their overallvacation experiences and building state-of-the-art ships with innovative onboard offerings and unequaled guestservices. We are continuing to work on the next generation of innovative guest experiences so as to ensure wewill be consistently exceeding our guest expectations.

Princess celebrated its 50th anniversary this year with an array of celebratory activities and entertainmentthroughout the year to commemorate half a century of cruising, including a reunion of the original cast of “TheLove Boat” TV series, and an award winning float in the New Years’ Day Rose Bowl Parade. Also, Cunardcelebrated its 175th anniversary in cities around the world that climaxed in May with the first ever meeting of thethree Queens in Liverpool, England. This event attracted more than 1.3 million shoreside spectators, in what mayhave been the largest attendance at a single day maritime event anywhere in the world. Finally, we had a fiveship event in the Sydney Harbor for P&O Cruises (Australia) that attracted well over three hours of live coverageon Australia’s “Today” show.

Strong relationships with our travel agents are especially vital to our success. We continue to strengthen ourrelationship with the travel agent community by increasing our communication and outreach, implementingchanges based on travel agent feedback and improving our educational programs to assist agents in stimulatingcruise demand.

In 2015, we reinforced our leadership position in China with the successful introduction of our fourth shiphomeported in China. We believe that we have significant opportunities to continue to grow our presence inChina due to its large and growing middle-class population and expansion of their international tourism. We alsointend to expand our brand portfolio in China in the future. As we execute our strategy to accelerate growth inChina, we have the benefit of nine years of local experience to help guide our expansion and enhance our cruiseproducts and services to make them even more attractive to our Chinese guests.

With 99 ships and more than 10.8 million guests in 2015, we have the scale to optimize our structure by utilizingour combined purchasing volumes and common technologies as well as implementing cross-brand initiativesaimed at cost containment. We have also established global leadership positions for communications, guestexperience, maritime, procurement, revenue management and strategy to increase collaboration andcommunication across our brands and help coordinate our global efforts and initiatives.

We consider health, environment, safety, security and sustainability matters to be core guiding principles. Ouruncompromising commitment to the safety and comfort of our guests and crew is paramount to the success of ourbusiness. We are committed to operating a safe and reliable fleet and protecting the health, safety and security ofour guests, employees and all others working on our behalf, thereby promoting an organization that is free ofinjuries, illness and loss. We continue to focus on further enhancing the safety measures onboard all of our ships.We are also devoted to protecting the environment in which our vessels sail and the communities in which weoperate. We are dedicated to fully complying with, or exceeding, all relevant legal and statutory requirementsrelated to health, environment, safety, security and sustainability throughout our business.

We employ an average of 82,200 crew members, including officers, onboard the ships we currently operate,which excludes employees who are on a leave. We also have an average of 10,000 full-time and 2,400 part-time/seasonal shoreside employees. Our goal is to recruit, develop and retain the finest shipboard and shoresideemployees. A team of highly motivated and engaged employees is key to delivering vacation experiences thatexceed our guests’ expectations. We are a diverse organization and value and support our talented and diverse

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employee base. We also are committed to employing people from around the world and hiring them based on thequality of their experience, skills, education and character, without regard for their identification with any groupor classification of people.

In 2015, we introduced P&O Cruises (UK)’s 3,647-passenger Britannia, the largest ship ever built specificallyfor British guests and named by Her Majesty, Queen Elizabeth II. In addition, we signed eight new ship ordersthis year. As of January 22, 2016, we have a total of 17 cruise ships scheduled to be delivered between 2016 and2020. Some of these ships will replace existing capacity as less efficient ships exit our fleet. Since 2006, we haveremoved 17 ships from our fleet and will remove one more ship in March 2016. We have a disciplined, measuredapproach to capacity growth so that we achieve an optimal balance of supply and demand to maximize ourprofitability.

Outlook for the 2016 First Quarter and Full Year

On December 18, 2015, we said that we expected our adjusted diluted earnings per share for the 2016 firstquarter to be in the range of $0.28 to $0.32 and 2016 full year to be in the range of $3.10 to $3.40 (see “KeyPerformance Non-GAAP Financial Indicators”). Our guidance was based on the assumptions in the table below.

On January 26, 2016, updated only for the current assumptions in the table below, our adjusted diluted earningsper share for the 2016 full year would decrease by $0.08. This decrease was caused by foreign currency exchangerates, including both foreign currency translational and transactional impacts of $0.11 per share, partially offsetby a $0.03 per share increase due to lower fuel prices, net of forecasted realized losses on fuel derivatives. Inaddition, our adjusted diluted earnings per share for the 2016 first quarter would decrease by $0.02.

2016 Assumptions

December 18, 2015 January 26, 2016

First quarter fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . . . $ 239 $ 226Full year fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 246 $ 222First quarter currencies

U.S. dollar to Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.10 $1.08U.S. dollar to Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.51 $1.44U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.73 $0.71U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.73 $0.71

Full year currenciesU.S. dollar to Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.10 $1.08U.S. dollar to Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.51 $1.43U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.73 $0.70U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.73 $0.71

The fuel and currency assumptions used in our guidance change daily and, accordingly, our forecasts changedaily based on the changes in these assumptions.

The above forward-looking statements involve risks, uncertainties and assumptions with respect to us. There aremany factors that could cause our actual results to differ materially from those expressed above including, but notlimited to, incidents, such as ship incidents, security incidents, the spread of contagious diseases and threatsthereof, adverse weather conditions or other natural disasters and the related adverse publicity, economicconditions and adverse world events, changes in and compliance with various laws and regulations under whichwe operate and other factors that could adversely impact our revenues, costs and expenses. You should read theabove forward-looking statements together with the discussion of these and other risks under “Cautionary NoteConcerning Factors That May Affect Future Results.”

Critical Accounting Estimates

Our critical accounting estimates are those that we believe require our most significant judgments about theeffect of matters that are inherently uncertain. A discussion of our critical accounting estimates, the underlyingjudgments and uncertainties used to make them and the likelihood that materially different estimates would bereported under different conditions or using different assumptions is as follows:

Ship Accounting

Our most significant assets are our ships, including ship improvements and ships under construction, whichrepresent 78% of our total assets at November 30, 2015. We make several critical accounting estimates with

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respect to our ship accounting. First, in order to compute our ships’ depreciation expense, which represented 11%of our cruise costs and expenses in 2015, we have to estimate the useful life of each of our ships as well as theirresidual values. Secondly, we account for ship improvement costs by capitalizing those costs that we believe addvalue to our ships and have a useful life greater than one year, and depreciate those improvements over theshorter of their or the ships’ estimated remaining useful life, while the costs of repairs and maintenance,including minor improvement costs and dry-dock expenses, are charged to expense as incurred. Finally, when werecord the retirement of a ship component that is included within the ship’s cost basis, we may have to estimatethe net book value of the asset being retired in order to remove it from the ship’s cost basis.

We determine the useful life of our ships and ship improvements based on our estimates of the period over whichthe assets will be of economic benefit to us, including the impact of long-term vacation market conditions,marketing and technical obsolescence, competition, physical deterioration, historical useful lives of similarly-built ships, regulatory constraints and maintenance requirements. In addition, we consider estimates of theweighted-average useful lives of the ships’ major component systems, such as the hull, cabins, main electric,superstructure and engines. Taking all of this into consideration, we have estimated our new ships’ useful lives at30 years.

We determine the residual value of our ships based on our long-term estimates of their resale value at the end oftheir useful life to us but before the end of their physical and economic lives to others, historical resale values ofour and other cruise ships and viability of the secondary cruise ship market. We have estimated our residualvalues at 15% of our original ship cost.

Given the large size and complexity of our ships, ship accounting estimates require considerable judgment andare inherently uncertain. We do not have cost segregation studies performed to specifically componentize ourships. In addition, since we do not separately componentize our ships, we do not identify and track depreciationof original ship components. Therefore, we typically have to estimate the net book value of components that areretired, based primarily upon their replacement cost, their age and their original estimated useful lives.

If materially different conditions existed, or if we materially changed our assumptions of ship useful lives andresidual values, our depreciation expense, loss on retirement of ship components and net book value of our shipswould be materially different. In addition, if we change our assumptions in making our determinations as towhether improvements to a ship add value, the amounts we expense each year as repair and maintenance expensecould increase, which would be partially offset by a decrease in depreciation expense, resulting from a reductionin capitalized costs. Our 2015 ship depreciation expense would have increased by approximately $40 millionassuming we had reduced our estimated 30-year ship useful life estimate by one year at the time we took deliveryor acquired each of our ships. In addition, our 2015 ship depreciation expense would have increased byapproximately $210 million assuming we had estimated our ships to have no residual value at the time of theirdelivery or acquisition.

We believe that the estimates we made for ship accounting purposes are reasonable and our methods areconsistently applied in all material respects and, accordingly, result in depreciation expense that is based on arational and systematic method to equitably allocate the costs of our ships to the periods during which we usethem. In addition, we believe that the estimates we made are reasonable and our methods consistently applied inall material respects in determining (1) the useful life and residual values of our ships, including shipimprovements; (2) which improvement costs add value to our ships and (3) the net book value of ship componentassets being retired. Finally, we believe our critical ship accounting estimates are generally comparable withthose of other major cruise companies.

Asset Impairments

Impairment reviews of our cruise ships, goodwill and trademarks require us to make significant estimates todetermine the fair values of these assets and cruise brands.

For our cruise ships, we perform our impairment reviews, if required, at the individual cruise ship level, which isthe lowest level for which we maintain identifiable cash flows that are independent of the cash flows of otherassets and liabilities. See Note 11 – “Fair Value Measurements, Derivative Instruments and Hedging Activities”in the consolidated financial statements for a discussion of ship impairment charges recorded in 2014 and 2013.

We believe it is more-likely-than-not (“MLTN”) that each of our cruise brands’ estimated fair value that carrygoodwill at November 30, 2015 exceeded their carrying value. We also believe that it is MLTN that the

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estimated fair value of each of our cruise brands’ trademarks recorded at November 30, 2015 exceeded theircarrying values. See Note 11 – “Fair Value Measurements, Derivative Instruments and Hedging Activities” in theconsolidated financial statements for additional discussion of our goodwill and trademark impairment reviews.

The determination of fair value includes numerous assumptions that are subject to various risks and uncertainties,unless a comparable, viable actively-traded market exists, which is usually not the case for cruise ships, cruisebrands and trademarks. Our ships’ fair values are typically estimated based either on ship sales price negotiationsor discounted future cash flows. The principal assumptions used to calculate our discounted future cash flowsinclude forecasted future operating results over the expected period we believe the ships will have economicbenefit to us and their estimated residual values.

In performing qualitative assessments of our cruise brands that carry goodwill, qualitative factors that weconsider to determine their effect on each of the cruise brand’s estimated fair values include industry and marketconditions, macroeconomic conditions, changes to WACC, overall financial performance, changes in fuel pricesand capital expenditures. In determining the estimated fair values of cruise brands utilizing discounted futurecash flow analysis for our quantitative goodwill impairment tests, significant judgments are made related toforecasted operating results, including net revenue yields and net cruise costs including fuel prices; capacitychanges, including the expected rotation of vessels into, or out of, the cruise brand; WACC of marketparticipants, adjusted for the risk attributable to the geographic regions in which the cruise brand operates; capitalexpenditures; proceeds from forecasted dispositions of ships and terminal values.

In addition, in performing our qualitative assessments of our cruise brands’ significant trademarks, qualitativefactors that we consider to determine their effect on each of the cruise brand’s recorded trademarks’ estimatedfair values include industry and market conditions, macroeconomic conditions, changes to the WACC, changesin royalty rates and overall financial performance. In determining our trademark estimated fair values for ourquantitative impairment tests, we also use discounted future cash flow analysis, which requires some of the samesignificant judgments discussed above. Specifically, determining the estimated amount of royalties that we arerelieved from having to pay for the use of the associated trademarks is based upon forecasted cruise revenues anda market participant’s royalty rate. The royalty rates are estimated primarily using comparable royaltyagreements for similar industries.

We believe that we have made reasonable estimates and judgments in determining whether our cruise ships,goodwill and trademarks have been impaired. However, if there is a change in assumptions used or if there is achange in the conditions or circumstances influencing fair values in the future, then we may need to recognize animpairment charge.

Contingencies

We periodically assess the potential liabilities related to any lawsuits or claims brought against us, as well as forother known unasserted claims, including environmental, legal, regulatory, guest and crew and tax matters. Inaddition, we periodically assess the recoverability of our trade and other receivables and our charter-hire andother counterparty credit exposures, such as contractual nonperformance by our Asian ship charter tour operatorsand financial and other institutions with which we conduct significant business. Our credit exposure also includescontingent obligations related to cash payments received directly by travel agents and tour operators for cashcollected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’cruise payments made by them to their travel agents and tour operators regardless of whether we have receivedthese payments. While it is typically very difficult to determine the timing and ultimate outcome of these matters,we use our best judgment to determine if it is probable, or MLTN for income tax matters, that we will incur anexpense related to the settlement or final adjudication of such matters and whether a reasonable estimation ofsuch probable or MLTN loss, if any, can be made. In assessing probable losses, we make estimates of the amountof probable insurance recoveries, if any, which are recorded as assets. We accrue a liability and establish areserve when we believe a loss is probable or MLTN for income tax matters, and the amount of the loss can bereasonably estimated in accordance with U.S. GAAP. Such accruals and reserves are typically based ondevelopments to date, management’s estimates of the outcomes of these matters, our experience in contesting,litigating and settling other similar non-income tax matters, historical claims experience, actuarially determinedestimates of liabilities and any related insurance coverages. See Note 8 – “Contingencies,” Note 9 – “Taxation”and Note 11 – “Fair Value Measurements, Derivative Instruments and Hedging Activities” in the consolidatedfinancial statements for additional information concerning our contingencies.

Given the inherent uncertainty related to the eventual outcome of these matters and potential insurancerecoveries, it is possible that all or some of these matters may be resolved for amounts materially different from

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any provisions or disclosures that we may have made with respect to their resolution. In addition, as newinformation becomes available, we may need to reassess the amount of asset or liability that needs to be accruedrelated to our contingencies. All such revisions in our estimates could materially impact our results of operationsand financial position.

Results of Operations

We earn substantially all of our cruise revenues from the following:

– sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and fromairports near our ships’ home ports and cancellation fees. The cruise ticket price typically includesaccommodations, most meals, some non-alcoholic beverages and most onboard entertainment. We alsocollect fees, taxes and other charges from our guests, and

– sales of goods and services primarily onboard our ships not included in the cruise ticket price includingsubstantially all liquor and some non-alcoholic beverage sales, casino gaming, shore excursions, gift shopsales, photo sales, communication services, full service spas, specialty themed restaurants, cruise vacationprotection programs and pre- and post-cruise land packages. These goods and services are provided eitherdirectly by us or by independent concessionaires, from which we receive either a percentage of theirrevenues or a fee.

We incur cruise operating costs and expenses for the following:

– the costs of passenger cruise bookings, which represent costs that are directly associated with passengercruise ticket revenues, and include travel agent commissions, air and other transportation related costs, fees,taxes and other charges that vary with guest head counts and related credit and debit card or direct debitfees,

– onboard and other cruise costs, which represent costs that are directly associated with onboard and otherrevenues, and include the costs of liquor and some non-alcoholic beverages, costs of tangible goods sold byus in our gift shops and from our photo sales, communication costs, costs of cruise vacation protectionprograms, costs of pre- and post-cruise land packages and related credit and debit card or direct debitfees. Concession revenues do not have significant associated expenses because the costs and servicesincurred for concession revenues are borne by our concessionaires,

– fuel costs, which include fuel delivery costs,– payroll and related costs, which represent all costs related to our shipboard personnel, including deck and

engine crew, including officers, and hotel and administrative employees, while costs associated with ourshoreside personnel are included in selling and administrative expenses,

– food costs, which include both our guest and crew food costs and– other ship operating expenses, which include port costs that do not vary with guest head counts, repairs and

maintenance, including minor improvements and dry-dock expenses, hotel costs, entertainment, gains andlosses on ship sales, ship impairments, freight and logistics, insurance premiums and all other ship operatingexpenses.

For segment information related to our North America and EAA cruise brands’ revenues, expenses, operatingincome and other financial information, see Note 12 – “Segment Information” in the consolidated financialstatements.

Statistical Information

Years Ended November 30,

2015 2014 2013

ALBDs (in thousands) (a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307 76,000 74,033Occupancy percentage (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.8% 104.1% 105.1%Passengers carried (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,837 10,566 10,061Fuel consumption in metric tons (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,181 3,194 3,266Fuel consumption in metric tons per ALBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.041 0.042 0.044Fuel cost per metric ton consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 393 $ 636 $ 676Currencies

U.S. dollar to Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.12 $ 1.34 $ 1.32U.S. dollar to Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.54 $ 1.66 $ 1.56U.S. dollar to Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.76 $ 0.91 $ 0.98U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.79 $ 0.91 $ 0.97

(See next page for footnotes.)

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(a) ALBD is a standard measure of passenger capacity for the period that we use to approximate rate andcapacity variances, based on consistently applied formulas that we use to perform analyses to determine themain non-capacity driven factors that cause our cruise revenues and expenses to vary. ALBDs assume thateach cabin we offer for sale accommodates two passengers and is computed by multiplying passengercapacity by revenue-producing ship operating days in the period.

(b) In 2015 compared to 2014, we had a 1.7% capacity increase in ALBDs comprised of a 4.1% capacityincrease in our EAA brands and a slight capacity increase in our North America brands.

Our EAA brands’ capacity increase was caused by:

– full year impact from one Costa 3,692-passenger capacity ship delivered in 2014 and– the partial year impact from one P&O Cruises (UK) 3,647-passenger capacity ship delivered in

2015.

These increases were partially offset by:

– full year impact from the bareboat charter/sale of a Costa ship and a former Ibero ship and– more ship dry-dock days in 2015 compared to 2014.

Our North America brands’ slight capacity increase was caused by the full year impact from one Princess3,560-passenger capacity ship delivered in 2014.

This increase was partially offset by:

– more ship dry-dock days in 2015 compared to 2014 and– fewer ship operating days due to pro rated voyages.

In 2014 compared to 2013, we had a 2.7% capacity increase in ALBDs comprised of a 4.3% capacityincrease in our North America brands and a minor capacity increase in our EAA brands.

Our North America brands’ capacity increase was caused by:

– the full year impact from one Princess 3,560-passenger capacity ship delivered in 2013;– the partial year impact from one Princess 3,560-passenger capacity ship delivered in 2014 and– fewer ship dry-dock days in 2014 compared to 2013.

(c) In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, whichassumes two passengers per cabin even though some cabins can accommodate three or morepassengers. Percentages in excess of 100% indicate that on average more than two passengers occupiedsome cabins.

2015 Compared to 2014

Revision of Prior Period Financial Statements

Management’s discussion and analysis of the results of operations is based on the revised ConsolidatedStatement of Income for the year ended November 30, 2014 (see “Note 1 – General – Revision of Prior PeriodFinancial Statements” in the consolidated financial statements for additional discussion).

Revenues

Consolidated

Cruise passenger ticket revenues made up 74% of our 2015 total revenues. Cruise passenger ticket revenuesdecreased by $288 million, or 2.4%, to $11.6 billion in 2015 from $11.9 billion in 2014.

This decrease was caused by the foreign currency translational impact from a stronger U.S. dollar against theeuro, sterling and the Australian dollar (“2015 foreign currency translational impact”), which accounted for $715million.

This decrease was partially offset by:

– $205 million – 1.7% capacity increase in ALBDs;– $155 million – net increase in cruise ticket pricing, driven primarily by improvements in Alaskan and

Caribbean itineraries for our North America brands and Mediterranean and North European itineraries forour EAA brands, mostly offset by net unfavorable foreign currency transactional impacts and

– $86 million – slight increase in occupancy.

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The remaining 26% of 2015 total revenues were substantially all comprised of onboard and other cruiserevenues, which increased by $107 million, or 2.8%, to $3.9 billion in 2015 from $3.8 billion in 2014.

This increase was caused by:

– $185 million – higher onboard spending by our guests;– $65 million – 1.7% capacity increase in ALBDs and– $27 million – slight increase in occupancy.

These increases were partially offset by the 2015 foreign currency translational impact, which accounted for$165 million.

Onboard and other revenues included concession revenues that decreased slightly and remained at $1.1 billion inboth 2015 and 2014.

North America Brands

Cruise passenger ticket revenues made up 72% of our North America brands’ 2015 total revenues. Cruisepassenger ticket revenues increased by $152 million, or 2.2% to $7.0 billion in 2015 from $6.9 billion in 2014.

This increase was caused by:

– $132 million – 2.0 percentage point increase in occupancy and– $26 million – net increase in cruise ticket pricing, driven primarily by improvements in Alaskan and

Caribbean itineraries, mostly offset by unfavorable foreign currency transactional impacts.

The remaining 28% of our North America brands’ 2015 total revenues were comprised of onboard and othercruise revenues, which increased by $149 million, or 5.8%, to $2.7 billion in 2015 from $2.6 billion in 2014.

This increase was caused by:

– $110 million – higher onboard spending by our guests and– $49 million – 2.0 percentage point increase in occupancy.

These increases were partially offset by lower third party revenues, which accounted for $18 million.

Onboard and other revenues included concession revenues that increased by $12 million, or 1.6%, to $747million in 2015 from $735 million in 2014.

EAA Brands

Cruise passenger ticket revenues made up 82% of our EAA brands’ 2015 total revenues. Cruise passenger ticketrevenues decreased by $430 million, or 8.5%, to $4.6 billion in 2015 from $5.0 billion 2014.

This decrease was caused by:

– $715 million – 2015 foreign currency translational impact and– $58 million – 1.2 percentage point decrease in occupancy.

These decreases were partially offset by:

– $205 million – 4.1% capacity increase in ALBDs and– $135 million – increase in cruise ticket pricing, driven primarily by improvements in Mediterranean and

North European itineraries and favorable foreign currency transactional impacts.

The remaining 18% of our EAA brands’ 2015 total revenues were comprised of onboard and other cruiserevenues, which decreased by $81 million, or 7.3%, to $1.0 billion in 2015 from $1.1 billion in 2014.

This decrease was caused by the 2015 foreign currency translational impact, which accounted for $165 million.

This decrease was partially offset by:

– $51 million – higher onboard spending by our guests and– $45 million – 4.1% capacity increase in ALBDs.

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Onboard and other revenues included concession revenues that decreased by $38 million, or 10%, to $329million in 2015 from $367 million in 2014. This decrease was caused by the 2015 foreign currency translationalimpact.

Costs and Expenses

Consolidated

Operating costs and expenses decreased by $973 million, or 9.3%, to $9.4 billion in 2015 from $10.4 billion in2014.

This decrease was caused by:

– $776 million – lower fuel prices;– $475 million – 2015 foreign currency translational impact;– $53 million – nonrecurrence of impairment charges incurred in 2014 related to Grand Celebration and

Grand Holiday;– $43 million – lower fuel consumption per ALBD and– $20 million – gain on a litigation settlement.

These decreases were partially offset by:

– $176 million – 1.7% capacity increase in ALBDs;– $106 million – higher dry-dock expenses as a result of higher number of dry-dock days;– $37 million – nonrecurrence of a gain from the sale of Costa Voyager in 2014;– $28 million – slight increase in occupancy and– $47 million – various other operating expenses, net, partially offset by favorable foreign currency

transactional impacts.

Selling and administrative expenses remained flat at $2.1 billion in both 2015 and 2014.

Depreciation and amortization expenses decreased slightly and remained at $1.6 billion in both 2015 and 2014.

Our total costs and expenses as a percentage of revenues decreased to 84% in 2015 from 89% in 2014.

North America Brands

Operating costs and expenses decreased by $517 million, or 8.2%, to $5.8 billion in 2015 from $6.3 billion in2014.

This decrease was caused by:

– $503 million – lower fuel prices;– $41 million – decreases in commissions, transportation and other related expenses;– $25 million – lower fuel consumption per ALBD;– $19 million – gain on a litigation settlement and– $30 million – various other operating expenses, net, which included favorable foreign currency transactional

impacts.

These decreases were partially offset by:

– $58 million – higher dry-dock expenses as a result of higher number of dry-dock days and– $43 million – 2.0 percentage point increase in occupancy.

Our total costs and expenses as a percentage of revenues decreased to 81% in 2015 from 89% in 2014.

EAA Brands

Operating costs and expenses decreased by $472 million, or 12%, to $3.4 billion in 2015 from $3.9 billion in2014.

This decrease was caused by:

– $476 million – 2015 foreign currency translational impact;– $273 million – lower fuel prices and

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– $53 million – nonrecurrence of impairment charges incurred in 2014 related to Grand Celebration andGrand Holiday.

These decreases were partially offset by:

– $159 million – 4.1% capacity increase in ALBDs;– $49 million – higher dry-dock expenses as a result of higher number of dry-dock days;– $37 million – nonrecurrence of a gain from the sale of Costa Voyager recognized in 2014;– $26 million – increases in commissions, transportation and other related expenses and– $59 million – various other operating expenses, net, which included unfavorable foreign currency

transactional impacts.

Our total costs and expenses as a percentage of revenues decreased to 83% in 2015 from 86% in 2014.

Operating Income

Our consolidated operating income increased by $802 million, or 45%, to $2.6 billion in 2015 from $1.8 billionin 2014. Our North America brands’ operating income increased by $766 million, or 74%, to $1.8 billion in 2015from $1.0 billion in 2014, and our EAA brands’ operating income increased by $45 million, or 5.0%, to $938million in 2015 from $893 million in 2014. These changes were primarily due to the reasons discussed above.

Nonoperating Expense

Net interest expense decreased by $71 million, or 25%, to $217 million in 2015 from $288 million in 2014primarily due to lower level of average borrowings, favorable foreign currency exchange rates and lower interestrates.

Losses on fuel derivatives, net were comprised of the following (in millions):

Year EndedNovember 30,

2015 2014

Unrealized losses on fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(332) $(268)Realized losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244) (3)

Losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(576) $(271)

Net income tax expense increased by $33 million to $42 million in 2015 from $9 million in 2014.

Key Performance Non-GAAP Financial Indicators

We use net cruise revenues per ALBD (“net revenue yields”), net cruise costs per ALBD and net cruise costsexcluding fuel per ALBD as significant non-GAAP financial measures of our cruise segments’ financialperformance. These measures enable us to separate the impact of predictable capacity changes from the moreunpredictable rate changes that affect our business; gains and losses on ship sales and ship impairments, net; andrestructuring expenses that are not part of our core operating business. We believe these non-GAAP measuresprovide useful information to investors and expanded insight to measure our revenue and cost performance as asupplement to our U.S. GAAP consolidated financial statements.

Net revenue yields are commonly used in the cruise industry to measure a company’s cruise segment revenueperformance and for revenue management purposes. We use “net cruise revenues” rather than “gross cruiserevenues” to calculate net revenue yields. We believe that net cruise revenues is a more meaningful measure indetermining revenue yield than gross cruise revenues because it reflects the cruise revenues earned net of ourmost significant variable costs, which are travel agent commissions, cost of air and other transportation, certainother costs that are directly associated with onboard and other revenues and credit and debit cardfees. Substantially all of our remaining cruise costs are largely fixed, except for the impact of changing pricesand food expenses, once our ship capacity levels have been determined.

Net passenger ticket revenues reflect gross passenger ticket revenues, net of commissions, transportation andother costs. Net onboard and other revenues reflect gross onboard and other revenues, net of onboard and othercruise costs. Net passenger ticket revenue yields and net onboard and other revenue yields are computed bydividing net passenger ticket revenues and net onboard and other revenues by ALBDs.

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Net cruise costs per ALBD and net cruise costs excluding fuel per ALBD are the most significant measures weuse to monitor our ability to control our cruise segments’ costs rather than gross cruise costs per ALBD. Weexclude the same variable costs that are included in the calculation of net cruise revenues to calculate net cruisecosts with and without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Inaddition, we exclude gains and losses on ship sales and ship impairments, net and restructuring expenses fromour calculation of net cruise costs with and without fuel as they are not considered part of our core operatingbusiness and, therefore, are not an indication of our future earnings performance. As such, we also believe it ismore meaningful for gains and losses on ship sales and ship impairments, net and restructuring expenses to beexcluded from our net income and earnings per share and, accordingly, we present adjusted net income andadjusted earnings per share excluding these items.

As a result of our revision of 2014 and 2013 cruise ship operating expenses, our previously reported resultschanged as follows (in millions, except per ALBD data):

Year Ended November 30, 2014 Year Ended November 30, 2013

As PreviouslyReported As Revised

As PreviouslyReported As Revised

Gross cruise costs per ALBD . . . . . . . . . . . . . . . . . . . $161.69 $161.93 $166.83 $167.12Net cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . $124.35 $124.59 $126.05 $126.34Net cruise costs excluding fuel per ALBD . . . . . . . . . $ 97.60 $ 97.84 $ 96.23 $ 96.51U.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . 1,236 1,216 1,078 1,055Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . 1,524 1,504 1,232 1,209

In addition, our EAA cruise brands utilize the euro, sterling and Australian dollar as their functional currency, themonetary unit of the primary economic environment in which they operate, to measure their results and financialcondition. This subjects us to foreign currency translational risk. All of our North American and EAA cruisebrands also have revenues and expenses that are in a currency other than their functional currency. This subjectsus to foreign currency transactional risk.

We report non-GAAP financial measures on a “constant dollar” and “constant currency” basis assuming the 2015and 2014 periods’ currency exchange rates have remained constant with the 2014 and 2013 periods’ rates,respectively. These metrics facilitate a comparative view for the changes in our business in an environment withfluctuating exchange rates.

Constant dollar reporting is a Non-GAAP financial measure that removes only the impact of changes inexchange rates on the translation of our EAA brands.

Constant currency reporting is a Non-GAAP financial measure that removes the impact of changes in exchangerates on the translation of our EAA brands (as in constant dollar) plus the transactional impact of changes inexchange rates from revenues and expenses that are denominated in a currency other than the functional currencyfor both our North America and EAA brands.

Examples:

– The translation of our EAA brand operations to our U.S. dollar reporting currency results in decreases inreported U.S. dollar revenues and expenses if the U.S. dollar strengthens against these foreign currenciesand increases in reported U.S. dollar revenues and expenses if the U.S. dollar weakens against these foreigncurrencies.

– Our North America brands have a U.S. dollar functional currency but also have revenue and expensetransactions in currencies other than the U.S. dollar. If the U.S. dollar strengthens against these othercurrencies, it reduces the U.S. dollar revenues and expenses. If the U.S. dollar weakens against these othercurrencies, it increases the U.S. dollar revenues and expenses.

– Our EAA brands have a euro, sterling and Australian dollar functional currency but also have revenue andexpense transactions in currencies other than their functional currency. If their functional currencystrengthens against these other currencies, it reduces the functional currency revenues and expenses. If thefunctional currency weakens against these other currencies, it increases the functional currency revenuesand expenses.

Our foreign currency transactional impact is more significant to our 2015 results compared to 2014 and 2013given the continuing expansion of our global business and the heightened volatility in foreign currency exchangerates. This differed from previous years when our constant dollar reporting removed substantially all of the

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impact of changes in currency exchange rates between periods. Accordingly, we also reported on a constantcurrency basis beginning in 2015. See “Quantitative and Qualitative Disclosures About Market Risk” for afurther discussion of the 2016 impact of currency exchange rate changes.

Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedgesare recognized currently in earnings. We believe that unrealized gains and losses on fuel derivatives are not anindication of our earnings performance since they relate to future periods and may not ultimately be realized inour future earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuelderivatives to be excluded from our net income and earnings per share and, accordingly, we present adjusted netincome and adjusted earnings per share excluding these unrealized gains and losses.

We have excluded from our earnings guidance the impact of unrealized gains and losses on fuel derivativesbecause we do not believe they are an indication of our future earnings performance. Accordingly, our earningsguidance is presented on an adjusted basis only. As a result, management has not provided a reconciliationbetween forecasted adjusted earnings per share guidance and forecasted U.S. GAAP earnings per share guidancebecause it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation withoutunreasonable effort. However, we do forecast realized gains and losses on fuel derivatives by applying currentBrent prices to the derivatives that settle in the forecast period.

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or superior to thefinancial information prepared in accordance with U.S. GAAP. There are no specific rules for determining ournon-GAAP as reported, constant dollar and constant currency financial measures and, accordingly, they aresusceptible to varying calculations, and it is possible that they may not be exactly comparable to the like-kindinformation presented by other companies, which is a potential risk associated with using these measures tocompare us to other companies.

Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues byALBDs as follows (dollars in millions, except yields):

Years Ended November 30,

2015

2015Constant

Dollar 2014

2014Constant

Dollar 2013

Passenger ticket revenues . . . . . . . . . . . . . . . $ 11,601 $ 12,316 $ 11,889 $ 11,787 $ 11,648Onboard and other revenues . . . . . . . . . . . . . 3,887 4,052 3,780 3,765 3,598

Gross cruise revenues . . . . . . . . . . . . . . . . . 15,488 16,368 15,669 15,552 15,246Less cruise costs

Commissions, transportation and other . . . (2,161) (2,324) (2,299) (2,277) (2,303)Onboard and other . . . . . . . . . . . . . . . . . . . (526) (549) (519) (516) (539)

(2,687) (2,873) (2,818) (2,793) (2,842)

Net passenger ticket revenues . . . . . . . . . . . . 9,440 9,992 9,590 9,510 9,345Net onboard and other revenues . . . . . . . . . . 3,361 3,503 3,261 3,249 3,059

Net cruise revenues . . . . . . . . . . . . . . . . $ 12,801 $ 13,495 $ 12,851 $ 12,759 $ 12,404

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952 75,999,952 74,032,939

Gross revenue yields . . . . . . . . . . . . . . . . . . $ 200.34 $ 211.73 $ 206.17 $ 204.63 $ 205.94% (decrease) increase vs. prior year . . . . . . . (2.8)% 2.7% 0.1% (0.6)%

Net revenue yields . . . . . . . . . . . . . . . . . . . . $ 165.58 $ 174.57 $ 169.09 $ 167.88 $ 167.56% (decrease) increase vs. prior year . . . . . . . (2.1)% 3.2% 0.9% 0.2%Net passenger ticket revenue yields . . . . . . $ 122.11 $ 129.25 $ 126.18 $ 125.14 $ 126.23% (decrease) increase vs. prior year . . . . . . . (3.2)% 2.4% 0.0% (0.9)%Net onboard and other revenue yields . . . . $ 43.48 $ 45.32 $ 42.90 $ 42.75 $ 41.33% increase vs. prior year . . . . . . . . . . . . . . . . 1.3% 5.6% 3.8% 3.4%

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Years Ended November 30,

2015

2015ConstantCurrency 2014

Net passenger ticket revenues . . . . . . . . . . . . $ 9,440 $ 10,123 $ 9,590Net onboard and other revenues . . . . . . . . . . 3,361 3,513 3,261

Net cruise revenues . . . . . . . . . . . . . . . . . . . $ 12,801 $ 13,636 $ 12,851

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Net revenue yields . . . . . . . . . . . . . . . . . . . . $ 165.58 $ 176.39 $ 169.09% (decrease) increase vs. prior year . . . . . . . (2.1)% 4.3%Net passenger ticket revenue yields . . . . . . $ 122.11 $ 130.94 $ 126.18% (decrease) increase vs. prior year . . . . . . . (3.2)% 3.8%Net onboard and other revenue yields . . . . $ 43.48 $ 45.45 $ 42.90% increase vs. prior year . . . . . . . . . . . . . . . . 1.3% 5.9%

Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividingthe gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows (dollars in millions,except costs per ALBD):

Years Ended November 30,

2015

2015Constant

Dollar 2014

2014Constant

Dollar 2013

Cruise operating expenses . . . . . . . . . . . . . . . . . . $ 9,292 $ 9,767 $ 10,261 $ 10,201 $ 10,502Cruise selling and administrative expenses . . . . . 2,058 2,168 2,046 2,035 1,871

Gross cruise costs . . . . . . . . . . . . . . . . . . . . . . . 11,350 11,935 12,307 12,236 12,373Less cruise costs included above

Commissions, transportation and other . . . . . . (2,161) (2,324) (2,299) (2,277) (2,303)Onboard and other . . . . . . . . . . . . . . . . . . . . . . (526) (549) (519) (516) (539)Restructuring expenses . . . . . . . . . . . . . . . . . . (25) (30) (18) (18) -Gains (losses) on ship sales and ship

impairments, net . . . . . . . . . . . . . . . . . . . . . 8 8 (2) (5) (178)

Net cruise costs . . . . . . . . . . . . . . . . . . . . . . . . . 8,646 9,040 9,469 9,420 9,353Less fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,249) (1,249) (2,033) (2,033) (2,208)

Net cruise costs excluding fuel . . . . . . . . . . . . . . $ 7,397 $ 7,791 $ 7,436 $ 7,387 $ 7,145

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952 75,999,952 74,032,939

Gross cruise costs per ALBD . . . . . . . . . . . . . . . $ 146.81 $ 154.39 $ 161.93 $ 161.00 $ 167.12% decrease vs. prior year . . . . . . . . . . . . . . . . . . (9.3)% (4.7)% (3.1)% (3.7)%

Net cruise costs per ALBD . . . . . . . . . . . . . . . . $ 111.83 $ 116.94 $ 124.59 $ 123.94 $ 126.34% decrease vs. prior year . . . . . . . . . . . . . . . . . . (10.2)% (6.1)% (1.4)% (1.9)%Net cruise costs excluding fuel per ALBD . . . . $ 95.68 $ 100.78 $ 97.84 $ 97.19 $ 96.51% (decrease) increase vs. prior year . . . . . . . . . . (2.2)% 3.0% 1.4% 0.7%

Years Ended November 30,

2015

2015ConstantCurrency 2014

Net cruise costs excluding fuel . . . . . . . . . . . . . $ 7,397 $ 7,828 $ 7,436

ALBDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,307,323 77,307,323 75,999,952

Net cruise costs excluding fuel per ALBD . . . . $ 95.68 $ 101.26 $ 97.84% (decrease) increase vs. prior year . . . . . . . . . . (2.2)% 3.5%

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Adjusted fully diluted earnings per share was computed as follows (in millions, except per share data):

Years Ended November 30,

2015 2014 2013

Net incomeU.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,757 $1,216 $1,055Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 18 -(Gains) losses on ship sales and ship impairments, net . . . . . . . . . . . . . . . (8) 2 (a) 163 (b)Ibero trademark and other impairment charges . . . . . . . . . . . . . . . . . . . . . - - 27 (c)Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . . . . . . . . . . 332 268 (36)

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,106 $1,504 $1,209

Weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 778 777

Earnings per shareU.S. GAAP earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56 $ 1.36Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03 0.02 -(Gains) losses on ship sales and ship impairments, net . . . . . . . . . . . . . . . (0.01) - (a) 0.21 (b)Ibero trademark and other impairment charges . . . . . . . . . . . . . . . . . . . . . - - 0.03 (c)Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . . . . . . . . . . 0.42 0.35 (0.05)

Adjusted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.70 $ 1.93 $ 1.55

(a) Represents impairment charges of $22 million for Grand Celebration and $31 million for Grand Holiday,partially offset by gains of $37 million from the sale of Costa Voyager and $14 million from the sale ofOcean Princess.

(b) Substantially due to $176 million of impairment charges related to Costa Classica and Costa Voyager,partially offset by a $15 million gain in our Tour and Other segment from the sale of a former HollandAmerica Line ship, which was on charter to an unaffiliated entity.

(c) Represents impairment charges of $14 million for an investment and $13 million for Ibero’s remainingtrademarks’ carrying value.

Net cruise revenues decreased slightly by $50 million, to $12.8 billion in 2015 from $12.9 billion in 2014.

The slight decrease in net cruise revenues was caused by:

– $695 million – 2015 foreign currency translational impact and– $141 million – 2015 foreign currency transactional impact.

These decreases were partially offset by:

– $565 million – 4.3% increase in constant currency net revenue yields and– $221 million – 1.7% capacity increase in ALBDs.

The 4.3% increase in net revenue yields on a constant currency basis was due to a 3.8% increase in net passengerticket revenue yields and a 5.9% increase in net onboard and other revenue yields.

The 3.8% increase in net passenger ticket revenue yields was caused by a 5.9% increase from our North Americabrands and a slight increase from our EAA brands. The increase in net passenger ticket revenue yields was drivenprimarily by improvements in Alaskan and Caribbean itineraries for our North America brands.

The 5.9% increase in net onboard and other revenue yields was caused by a 7.1% increase from our NorthAmerica brands and a 2.2% increase from our EAA brands.

Gross cruise revenues decreased by $181 million, or 1.2%, to $15.5 billion in 2015 from $15.7 billion in 2014 forlargely the same reasons as discussed above.

Net cruise costs excluding fuel decreased slightly by $39 million and remained at $7.4 billion in 2015 and 2014.

The slight decrease in net cruise costs excluding fuel was caused by:

– $395 million – 2015 foreign currency translational impact and– $37 million – 2015 foreign currency transactional impact.

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These decreases were partially offset by:

– $265 million – 3.5% increase in constant currency net cruise costs excluding fuel per ALBD and– $128 million – 1.7% capacity increase in ALBDs.

The 3.5% increase in constant currency net cruise costs excluding fuel per ALBD were primarily due to:

– $106 million – higher dry dock expenses as a result of higher number of dry-dock days and– $88 million – higher selling, general and administrative expenses.

Fuel costs decreased by $784 million, or 39%, to $1.2 billion in 2015 from $2.0 billion in 2014.

This decrease was caused by:

– $776 million – lower fuel prices and– $43 million – lower fuel consumption per ALBD.

These decreases in fuel costs were partially offset by our 1.7% capacity increase in ALBDs, which accounted for$35 million.

Gross cruise costs decreased by $957 million, or 7.8%, to $11.4 billion in 2015 from $12.3 billion in 2014 forprincipally the same reasons as discussed above.

2014 Compared to 2013

Revision of Prior Period Financial Statements

Management’s discussion and analysis of the results of operations is based on the revised ConsolidatedStatements of Income for the years ended November 30, 2014 and November 30, 2013 (see “Note 1 – General –Revision of Prior Period Financial Statements” in the consolidated financial statements for additional discussion).

Revenues

Consolidated

Cruise passenger ticket revenues made up 75% of our 2014 total revenues. Cruise passenger ticket revenuesincreased by $241 million, or 2.1%, to $11.9 billion in 2014 from $11.6 billion in 2013.

This increase was caused by:

– $309 million – 2.7% capacity increase in ALBDs and– $102 million – foreign currency translational impact from a weaker U.S. dollar against the euro and sterling,

net of a stronger U.S. dollar against the Australian dollar (“2014 net foreign currency translational impact”).

These increases were partially offset by:

– $114 million – 1.0 percentage point decrease in occupancy and– $37 million – decrease in cruise ticket pricing.

The remaining 25% of 2014 total revenues were substantially all comprised of onboard and other cruiserevenues, which increased by $182 million, or 5.1%, to $3.8 billion in 2014 from $3.6 billion in 2013.

This increase was caused by:

– $96 million – 2.7% capacity increase in ALBDs and– $92 million – higher onboard spending by our guests.

These increases were partially offset by a 1.0 percentage point decrease in occupancy, which accounted for $36million.

Onboard and other revenues included concession revenues of $1.1 billion in both 2014 and 2013.

North America Brands

Cruise passenger ticket revenues made up 73% of our 2014 total revenues. Cruise passenger ticket revenuesincreased slightly by $19 million to $6.9 billion in 2014 from $6.8 billion in 2013.

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This increase was caused by a 4.3% capacity increase in ALBDs, which accounted for $294 million.

This increase was partially offset by:

– $130 million – 2.0 percentage point decrease in occupancy;– $75 million – decrease in cruise ticket pricing and– $58 million – decrease in air transportation revenues from guests who purchased their tickets from us.

Our cruise ticket pricing decrease was driven by the promotional pricing environment in the Caribbean resultingfrom the large increase in cruise industry capacity.

The remaining 27% of 2014 total revenues were comprised of onboard and other cruise revenues, whichincreased by $168 million, or 7.0%, to $2.6 billion in 2014 from $2.4 billion in 2013.

This increase was caused by:

– $103 million – 4.3% capacity increase in ALBDs;– $78 million – higher onboard spending by our guests and– $20 million – higher other third-party revenues.

These increases were partially offset by:

– $46 million – 2.0 percentage point decrease in occupancy.

Onboard and other revenues included concession revenues of $735 million in 2014 and $727 million in 2013.

EAA Brands

Cruise passenger ticket revenues made up 82% of our 2014 total revenues. Cruise passenger ticket revenuesincreased by $223 million, or 4.6%, to $5.0 billion in 2014 from $4.8 billion 2013.

This increase was substantially due to:

– $102 million – 2014 net foreign currency translational impact;– $49 million – increase in air transportation revenues from guests who purchased their tickets from us;– $39 million – increase in cruise ticket pricing and– $23 million – slight increase in occupancy.

The remaining 18% of 2014 total revenues were comprised of onboard and other cruise revenues, whichincreased by $19 million, or 1.7%, and remained at $1.1 billion in both 2014 and 2013.

Onboard and other revenues included concession revenues of $367 million in 2014 and $370 million in 2013.

Costs and Expenses

Consolidated

Operating costs and expenses decreased by $223 million, or 2.1%, to $10.4 billion in 2014 from $10.6 billion in2013.

This decrease was caused by:

– $176 million – nonrecurrence in 2014 of impairment charges related to Costa Classica and Costa Voyager;– $126 million – lower fuel prices;– $107 million – lower fuel consumption per ALBD;– $64 million – decreases in commissions, transportation and other related expenses primarily due to a

decrease in air transportation costs related to guests who purchased their tickets from us;– $56 million – nonrecurrence in 2014 of additional costs and expenses related to the 2013 voyage

disruptions, net of third-party insurance recoverables of $20 million;– $51 million – gains from the sales of Costa Voyager and Ocean Princess;– $42 million – lower dry-dock and other ship repair and maintenance expenses and– $38 million – 1.0 percentage point decrease in occupancy.

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These decreases were partially offset by:

– $278 million – 2.7% capacity increase in ALBDs;– $59 million – 2014 net foreign currency translational impact;– $53 million – impairment charges related to Grand Celebration and Grand Holiday and– $47 million – various other operating expenses, net.

Selling and administrative expenses increased by $175 million, or 9.3%, to $2.1 billion in 2014 from $1.9 billionin 2013.

Depreciation and amortization expenses increased by $47 million, or 3.0%, and remained at $1.6 billion in both2014 and 2013.

Our total costs and expenses as a percentage of revenues decreased to 89% in 2014 from 91% in 2013.

North America Brands

Operating costs and expenses decreased slightly by $26 million and remained at $6.3 billion in both 2014 and2013.

This decrease was caused by:

– $103 million – decreases in commissions, transportation and other related expenses primarily due to adecrease in air transportation costs related to guests who purchased their tickets from us;

– $87 million – lower fuel prices;– $58 million – lower fuel consumption per ALBD;– $56 million – nonrecurrence in 2014 of additional costs and expenses related to the 2013 voyage

disruptions, net of third-party insurance recoverables of $20 million;– $43 million – 2.0 percentage point decrease in occupancy;– $47 million – lower dry-dock and other ship repair and maintenance expenses and– $14 million – gain from the sale of Ocean Princess.

These decreases were partially offset by:

– $271 million – 4.3% capacity increase in ALBDs;– $39 million – nonrecurrence in 2014 of an intersegment transaction, which was fully offset in our Cruise

Support segment and– $72 million – various other operating expenses, net.

Our total costs and expenses as a percentage of revenues decreased to 89% in 2014 from 90% in 2013.

EAA Brands

Operating costs and expenses decreased by $223 million, or 5.4%, to $3.9 billion in 2014 from $4.1 billion in2013.

This decrease was caused by:

– $176 million – nonrecurrence in 2014 of impairment charges related to Costa Classica and Costa Voyager;– $51 million – lower fuel consumption per ALBD;– $41 million – lower fuel prices;– $39 million – lower dry-dock and other ship repair and maintenance expenses;– $37 million – gain from the sale of Costa Voyager and– $37 million – various other operating expenses, net.

These decreases were partially offset by:

– $59 million – 2014 net foreign currency translational impact;– $53 million – impairment charges related to Grand Celebration and Grand Holiday and– $46 million – increases in commissions, transportation and other related expenses principally due to an

increase in air transportation costs related to guests who purchased their tickets from us.

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Our total costs and expenses as a percentage of revenues decreased to 86% in 2014 from 92% in 2013.

Operating Income

Our consolidated operating income increased by $443 million, or 33%, to $1.8 billion in 2014 from $1.3 billionin 2013. Our North America brands’ operating income increased by $108 million, or 12%, to $1.0 billion in 2014from $933 million in 2013, and our EAA brands’ operating income increased by $422 million, or 90%, to $893million in 2014 from $471 million in 2013. These changes were primarily due to the reasons discussed above.

Nonoperating Expense

Net interest expense decreased by $31 million, or 9.7%, to $288 million in 2014 from $319 million in 2013.

(Losses) gains on fuel derivatives, net were comprised of the following (in millions):

Year Ended November 30,

2014 2013

Unrealized (losses) gains on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(268) $36Realized losses on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) -

(Losses) gains on fuel derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(271) $36

Key Performance Non-GAAP Financial Indicators

Net cruise revenues increased by $447 million, or 3.6%, to $12.9 billion in 2014 from $12.4 billion in 2013.

This increase in net cruise revenues was caused by:

– $330 million – 2.7% capacity increase in ALBDs;– $92 million – 2014 net foreign currency translational impact and– $24 million – slight increase in constant dollar net revenue yields.

The increase in net revenue yields on a constant dollar basis was caused by a 3.4% increase in net onboard andother revenue yields, partially offset by a slight decrease in net passenger ticket revenue yields.

The 3.4% increase in net onboard and other revenue yields resulted from a 3.7% increase from our NorthAmerica brands and a 2.8% increase from our EAA brands, which included increases in primarily all the netonboard revenue categories. The slight decrease in net passenger ticket revenue yields was driven by our NorthAmerica brands’ promotional pricing environment in the Caribbean resulting from the large increase in cruiseindustry capacity, partially offset by improvements at our continental European brands.

Gross cruise revenues increased by $423 million, or 2.8%, to $15.7 billion in 2014 from $15.2 billion in 2013 forlargely the same reasons as discussed above.

Net cruise costs excluding fuel increased by $290 million, or 4.1%, to $7.4 billion in 2014 from $7.1 billion in2013.

This increase was caused by:

– $190 million – 2.7% capacity increase in ALBDs;– $51 million – a slight increase in constant dollar net cruise costs excluding fuel per ALBD and– $49 million – 2014 net foreign currency translational impact.

Fuel costs decreased by $175 million, or 7.9%, to $2.0 billion in 2014 from $2.2 billion in 2013.

This decrease was caused by:

– $126 million – lower fuel prices and– $107 million – lower fuel consumption per ALBD.

These decreases were partially offset by our 2.7% capacity increase in ALBDs, which accounted for $59 million.

Gross cruise costs decreased slightly by $65 million to $12.3 billion in 2014 from $12.4 billion in 2013 forprincipally the same reasons as discussed above.

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Liquidity, Financial Condition and Capital Resources

Our primary financial goals are to profitably grow our cruise business and increase our ROIC, reaching doubledigit returns in the next two to three years, while maintaining a strong balance sheet. Our ability to generatesignificant operating cash flows allows us to internally fund our capital investments. We are committed toreturning free cash flows to our shareholders in the form of dividends and/or share buybacks. In addition, we arecommitted to maintaining our strong investment grade credit ratings. Other objectives of our capital structurepolicy are to maintain a sufficient level of liquidity with our available cash and cash equivalents and committedfinancings for immediate and future liquidity needs, and a reasonable debt maturity profile that is spread out overa number of years.

Based on our historical results, projections and financial condition, we believe that our future operating cashflows and liquidity will be sufficient to fund all of our expected capital projects including shipbuildingcommitments, ship improvements, debt service requirements, working capital needs and other firm commitmentsover the next several years. We believe that our ability to generate significant operating cash flows and ourstrong balance sheet as evidenced by our investment grade credit ratings provide us with the ability in mostfinancial credit market environments to obtain debt financing, as needed. Our future operating cash flows and ourability to issue debt can be adversely impacted by numerous factors outside our control including, but not limitedto, those noted under “Cautionary Note Concerning Factors That May Affect Future Results.” If our long-termsenior unsecured credit ratings were to be downgraded or assigned a negative outlook, our access to and cost ofdebt financing may be negatively impacted.

At November 30, 2015, we had a working capital deficit of $4.5 billion. This deficit included $3.3 billion ofcurrent customer deposits, which represent the passenger revenues already collected for cruises departing overthe next twelve months and, accordingly, are substantially more like deferred revenue balances rather than actualcurrent cash liabilities. Our November 30, 2015 working capital deficit also included $1.4 billion of current debtobligations. We continue to generate significant cash from operations and have a strong balance sheet. Thisstrong balance sheet provides us with the ability to refinance our current debt obligations before, or as theybecome due, in most financial credit market environments. We also have our revolving credit facilities availableto provide long-term rollover financing should the need arise, or if we choose to do so. After excluding currentcustomer deposits and current debt obligations from our November 30, 2015 working capital deficit balance, ouradjusted working capital was $141 million. Our business model, along with our strong balance sheet andunsecured revolving credit facilities, allows us to operate with a working capital deficit and still meet ouroperating, investing and financing needs. We believe we will continue to have working capital deficits for theforeseeable future.

At November 30, 2014, the U.S. dollar was $1.56 to sterling, $1.25 to the euro and $0.85 to the Australian dollar.Had these November 30, 2014 currency exchange rates been used to translate our November 30, 2015 non-U.S.dollar functional currency operations’ assets and liabilities instead of the November 30, 2015 U.S. dollarexchange rates of $1.50 to sterling, $1.06 to the euro and $0.72 to the Australian dollar, our total assets wouldhave been higher by $2.0 billion and our total liabilities would have been higher by $1.2 billion.

Sources and Uses of Cash

Operating Activities

Our business provided $4.5 billion of net cash from operations during 2015, an increase of $1.1 billion, or 32%,compared to $3.4 billion in 2014. This increase was caused by more cash being provided from our operatingresults and an increase in customer deposits. During 2014, our business provided $3.4 billion of net cash fromoperations, an increase of $596 million, or 21%, compared to $2.8 billion in 2013. This increase wassubstantially due to more cash being provided from our operating results and an increase in customer deposits.

Investing Activities

During 2015, net cash used in investing activities was $2.5 billion. This was substantially all due to ourexpenditures for capital projects, of which $981 million was spent on our ongoing new shipbuilding program,primarily for P&O Cruises (UK)’s Britannia. In addition to our new shipbuilding program, we had capitalexpenditures of $1.0 billion for ship improvements and replacements and $301 million for informationtechnology, buildings and improvements and other assets. Furthermore, in 2015 we received cash installments of$25 million from the sales of Ocean Princess, Seabourn Legend and Seabourn Spirit. Finally, we paid $219million of fuel derivative settlements.

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During 2014, our expenditures for capital projects were $2.6 billion, of which $1.5 billion was spent on ourongoing new shipbuilding program, substantially for Regal Princess and Costa Diadema. In addition to our newshipbuilding program, we had capital expenditures of $754 million for ship improvements and replacements and$305 million for information technology, buildings and improvements, and other assets. Furthermore, in 2014 wesold Costa Voyager and received $42 million in cash proceeds.

During 2013, our expenditures for capital projects were $2.1 billion, of which $1.3 billion was spent on ourongoing new shipbuilding program, including $836 million for the final delivery payments for AIDAstella andRoyal Princess. In addition to our new shipbuilding program, we had capital expenditures of $633 million forship improvements and replacements and $227 million for information technology and other assets. Furthermore,in 2013 we sold three of our Seabourn ships that are leaving the fleet by May 2015, and received $70 million incash proceeds, which represented substantially all of the sales price.

Financing Activities

During 2015, net cash used in financing activities of $942 million was substantially due to the following:

– repaid a net $633 million of short-term borrowings in connection with our availability of, and needs for,cash at various times throughout the period;

– repaid $1.2 billion of long-term debt, including an early repayment of $225 million under an export creditfacility;

– issued $1.3 billion of publicly-traded notes, which net proceeds are being used for general corporatepurposes;

– borrowed $697 million of long-term debt under an export credit facility and a bank loan;– paid cash dividends of $816 million;– purchased $533 million of shares of Carnival Corporation common stock in open market transactions of

which $276 million were purchased under our Repurchase Program and $257 million were purchased underour Stock Swap Program and

– sold $264 million of treasury stock under our Stock Swap program.

During 2014, net cash used in financing activities of $1.0 billion was substantially due to the following:

– borrowed a net $617 million of short-term borrowings in connection with our availability of, and needs for,cash at various times throughout the year;

– repaid $2.5 billion of long-term debt, including early repayments of $839 million of three bank loans and$590 million of two export credit facilities;

– borrowed $1.6 billion of new long-term debt under two export credit facilities and three bank loans and– paid cash dividends of $776 million.

During 2013, net cash used in financing activities of $780 million was substantially due to the following:

– borrowed a net $4 million of short-term borrowings in connection with our availability of, and needs for,cash at various times throughout the year;

– repaid $2.2 billion of long-term debt;– issued $1.7 billion of publicly-traded notes, of which $500 million was used to repay a like amount of

export credit facilities, and the remaining $1.2 billion was and will be used for general corporate purposes,including repayments of portions of debt facilities maturing through May 2014;

– borrowed $1.0 billion of new long-term debt under two export credit facilities and one bank loan;– paid cash dividends of $1.2 billion;– purchased $138 million of shares of Carnival Corporation common stock in open market transactions of

which $103 million were purchased under our Repurchase Program and $35 million were purchased underour Stock Swap Program and

– sold $35 million of treasury stock under our Stock Swap program.

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Future Commitments and Funding Sources

At November 30, 2015, our contractual cash obligations, including ship construction contracts entered intothrough January 22, 2016, were as follows (in millions):

Payments Due by

2016 2017 2018 2019 2020 Thereafter Total

Recorded Contractual Cash ObligationsShort-term borrowings . . . . . . . . . . . . . . . . . . . . $ 30 $ - $ - $ - $ - $ - $ 30Long-term debt (a) . . . . . . . . . . . . . . . . . . . . . . . 1,344 1,007 1,477 1,400 1,110 2,419 8,757Other long-term liabilities reflected on the

balance sheet (b) . . . . . . . . . . . . . . . . . . . . . . . - 366 280 58 51 161 916Unrecorded Contractual Cash ObligationsShipbuilding (c) . . . . . . . . . . . . . . . . . . . . . . . . . 1,950 1,288 2,459 3,014 2,388 - 11,099Operating leases (c) . . . . . . . . . . . . . . . . . . . . . . 52 41 34 31 29 203 390Port facilities and other (c) . . . . . . . . . . . . . . . . . 211 200 161 104 102 793 1,571Purchase obligations (d) . . . . . . . . . . . . . . . . . . . 915 81 39 14 10 13 1,072Fixed rate interest payments (e) . . . . . . . . . . . . . 173 145 121 106 88 287 920Floating rate interest payments (e) . . . . . . . . . . . 72 43 61 50 59 85 370

Total Contractual Cash Obligations (f) . . . . . $4,747 $3,171 $4,632 $4,777 $3,837 $3,961 $25,125

(a) Our long-term debt has a weighted-average maturity of 4.1 years. See Note 6 – “Unsecured Debt” in theconsolidated financial statements for additional information regarding these debt obligations.

(b) Represents cash outflows for certain of our long-term liabilities that could be reasonably estimated. Theprimary outflows are for estimates of our compensation plans’ obligations, crew and guest claims, uncertainincome tax position liabilities and certain deferred income taxes. Customer deposits and certain otherdeferred income taxes have been excluded from the table because they do not require a cash settlement inthe future.

(c) Our shipbuilding contractual obligations are legal commitments and, accordingly, cannot be canceledwithout cause by the shipyards or us, and such cancellation will subject the defaulting party to significantcontractual liquidating damage payments. See Note 7 – “Commitments” in the consolidated financialstatements for additional information regarding these contractual cash obligations.

(d) Represents legally-binding commitments to purchase inventory and other goods and services made in thenormal course of business to meet operational requirements. Many of our contracts contain clauses thatallow us to terminate the contract with notice, either with or without a termination penalty. Terminationpenalties are generally an amount less than the original obligation. Historically, we have not had anysignificant defaults of our contractual obligations or incurred significant penalties for their termination.

(e) Fixed rate interest payments represent cash outflows for fixed interest payments, including interest swappedfrom a floating rate to a fixed rate. Floating rate interest payments represent forecasted cash outflows forinterest payments on floating rate debt, including interest swapped from a fixed rate to a floating rate, usingthe November 30, 2015 forward interest rates for the remaining terms of the loans. Floating rate interestpayments also include debt issuance costs that are payable upon drawing under most of our cancellableexport credit facilities and facility fees on our revolving credit facilities.

(f) Amounts payable in foreign currencies, which are principally the euro, sterling and Australian dollars, arebased on the November 30, 2015 exchange rates.

As of November 30, 2015, our total annual capital expenditures consist of ships under contract for construction,including ship construction contracts entered into through January 22, 2016, estimated improvements to existingships and shoreside assets and are expected to be $3.5 billion in 2016, $2.7 billion in 2017, $3.8 billion in 2018,$4.4 billion in 2019 and $3.8 billion in 2020.

The year-over-year percentage increase in our annual capacity is currently expected to be 3.5% in 2016, 3.7% in2017, 2.4% in 2018, 5.3% in 2019 and 7.2% in 2020. These percentage increases are expected to result primarilyfrom contracted new ships entering service.

Our Boards of Directors have authorized, subject to certain restrictions, the repurchase of up to an aggregate of$1.0 billion of Carnival Corporation common stock and/or Carnival plc ordinary shares under the RepurchaseProgram. On January 28, 2016, the Boards of Directors approved a modification of the Repurchase Program

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authorization that increased the remaining $213 million of authorized repurchases by $1.0 billion. Accordingly,at January 28, 2016, the remaining availability under the Repurchase Program was $1.2 billion. SeeNote 10 – “Shareholders’ Equity” in the consolidated financial statements for a further discussion of theRepurchase Program.

In addition to the Repurchase Program, the Boards of Directors authorized, in October 2008, the repurchase of upto 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares ofCarnival Corporation common stock under the Stock Swap programs. Under the Stock Swap programs, we sellshares of Carnival Corporation common stock and/or Carnival plc ordinary shares, as the case may be, and use aportion of the net proceeds to purchase an equivalent number of Carnival plc ordinary shares or shares ofCarnival Corporation common stock, as applicable. We use the Stock Swap programs in situations where we canobtain an economic benefit because either Carnival Corporation common stock or Carnival plc ordinary sharesare trading at a price that is at a premium or discount to the price of Carnival plc ordinary shares or CarnivalCorporation common stock, as the case may be. Any realized economic benefit under the Stock Swap programsis used for general corporate purposes, which could include repurchasing additional stock under the RepurchaseProgram. Depending on market conditions and other factors, we may repurchase shares of Carnival Corporationcommon stock and/or Carnival plc ordinary shares under the Repurchase Program and the Stock Swap programsconcurrently.

Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap programsrequire annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.5 millionordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annual general meeting orJuly 13, 2016. Finally, under the Stock Swap programs, any sales of the Carnival Corporation common stock andCarnival plc ordinary shares have been or will be registered under the Securities Act of 1933.

At January 22, 2016, the remaining availability under the Stock Swap programs was 18.1 million Carnival plcordinary shares and 26.9 million shares of Carnival Corporation common stock. See Note 10 – “Shareholders’Equity” in the consolidated financial statements for a further discussion of the Stock Swap programs.

At November 30, 2015, we had liquidity of $10.4 billion. Our liquidity consisted of $1.2 billion of cash and cashequivalents, which excludes $226 million of cash used for current operations, $2.8 billion available forborrowing under our revolving credit facilities, and $6.5 billion under our committed future financings, which arecomprised of ship export credit facilities. Of this $6.5 billion, $1.5 billion is available for funding in 2016, $0.8billion in 2017, $1.8 billion in 2018, $0.8 billion in 2019 and $1.6 billion in 2020. At November 30, 2015, ourrevolving credit facilities are scheduled to mature in 2020. These commitments are from numerous large andwell-established banks and export credit agencies, which we believe will honor their contractual agreements withus.

Substantially all of our debt agreements contain financial covenants as described in Note 6 – “Unsecured Debt”in the consolidated financial statements. At November 30, 2015, we were in compliance with our debt covenants.In addition, based on, among other things, our forecasted operating results, financial condition and cash flows,we expect to be in compliance with our debt covenants for the foreseeable future. Generally, if an event ofdefault under any debt agreement occurs, then pursuant to cross default acceleration clauses, substantially all ofour outstanding debt and derivative contract payables could become due, and all debt and derivative contractscould be terminated.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingentinterests, certain derivative instruments and variable interest entities that either have, or are reasonably likely tohave, a current or future material effect on our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our hedging strategies and market risks, see the discussion below and Note 11 – “Fair ValueMeasurements, Derivative Instruments and Hedging Activities” in the consolidated financial statements.

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Foreign Currency Exchange Rate Risks

Operational Currency Risks

We have foreign operations that have functional currencies other than the U.S. dollar, which result in foreigncurrency translational impacts. We execute transactions in a number of currencies different than their functionalcurrencies, principally the euro, sterling and Australian, Canadian and U.S. dollars, which result in foreigncurrency transactional impacts. Based on a 10% hypothetical change in all currency exchange rates that wereused in our December 18, 2015 guidance, we estimate (including both the foreign currency translational andtransactional impacts) that our adjusted diluted earnings per share December 18, 2015 guidance would change bythe following:

– $0.30 per share on an annualized basis for 2016 and– $0.04 per share for the first quarter of 2016.

Investment Currency Risks

As of November 30 2015, we have foreign currency swaps and forwards of $387 million and $43 million,respectively, which settle through September 2019 and July 2017, respectively. These foreign currency swapsand forwards are designated as hedges of our net investments in foreign operations, which have a euro-denominated functional currency, thus partially offsetting the foreign currency exchange rate risk. Based on a10% hypothetical change in the U.S. dollar to euro exchange rate as of November 30, 2015, we estimate thatthese foreign currency swaps’ and forwards’ fair values would change by $44 million, which would be offset bya corresponding change of $44 million in the U.S. dollar value of our net investments.

Newbuild Currency Risks

In 2015, we entered into foreign currency zero cost collars that are designated as cash flow hedges for a portionof Majestic Princess’ and Seabourn Encore’s euro-denominated shipyard payments. The Majestic Princess’collars mature in March 2017 at a weighted-average ceiling of $590 million and a weighted-average floor of$504 million. The Seabourn Encore’s collars mature in November 2016 at a weighted-average ceiling of $221million and a weighted-average floor of $185 million. If the spot rate is between the weighted-average ceilingand floor rates on the date of maturity, then we would not owe or receive any payments under these collars. AtNovember 30, 2015, the estimated fair value of these outstanding foreign currency zero cost collars was a $26million liability. Based on a 10% hypothetical increase or decrease in the November 30, 2015 U.S. dollar to euroexchange rates, we estimate the fair value of our foreign currency zero cost collars’ liability would decrease $32million or increase $43 million, respectively.

At January 22, 2016, our remaining newbuild currency exchange rate risk relates to euro-denominated newbuildcontract payments, which represent a total unhedged commitment of $2.0 billion and substantially relates toCarnival Cruise Line, Holland America Line, P&O Cruises (Australia) and Seabourn newbuilds scheduled to bedelivered through 2019. The functional currency cost of each of these ships will increase or decrease based onchanges in the exchange rates until the payments are made under the shipbuilding contract, or we enter into aforeign currency hedge. Based on a 10% hypothetical change in the U.S. dollar to euro exchange rates as ofNovember 30, 2015, the unpaid cost of these ships would have a corresponding change of $194 million.

Interest Rate Risks

At November 30, 2015, we have interest rate swaps that have effectively changed $500 million of fixed rate debtto U.S. dollar LIBOR-based floating rate debt and $568 million of EURIBOR-based floating rate euro debt tofixed rate euro debt. Based on a 10% hypothetical change in the November 30, 2015 market interest rates, the fairvalue of all our debt and related interest rate swaps would change by $77 million. In addition, based on a 10%hypothetical change in the November 30, 2015 market interest rates, our annual interest expense on floating ratedebt, including the effect of our interest rate swaps, would change by an insignificant amount. Substantially all ofour fixed rate debt can only be called or prepaid by incurring additional costs.

Fuel Price Risks

Our exposure to market risk for changes in fuel prices substantially all relates to the consumption of fuel on ourships. We expect to consume approximately 3.3 million metric tons of fuel in 2016. Based on a 10% hypotheticalchange in our December 18, 2015 guidances’ forecasted average fuel price, we estimate that our 2016 fuelexpense, excluding the effect of zero cost collar fuel derivatives, would change by $80 million.

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We mitigate a portion of our economic risk attributable to potential fuel price increases through the use of Brentzero cost collars. The actual fuel we use on our ships is marine fuel. See Note 11 – “Fair Value Measurements,Derivative Instruments and Hedging Activities” in the consolidated financial statements for additional discussionof our fuel derivatives.

At November 30, 2015, our fuel derivatives cover a portion of our estimated fuel consumption through 2018. AtNovember 30, 2015, the estimated fair value of our outstanding fuel derivative contracts was a net liability of$561 million. Based on a 10% hypothetical increase or decrease in the November 30, 2015 Brent forward pricecurve, we estimate the fair value of our fuel derivatives’ net liability would decrease $101 million or increase$108 million, respectively. In addition, a 10% hypothetical change in our December 18, 2015 guidances’ Brentprice would result in a $0.04 per share change in realized losses on fuel derivatives for 2016 and a $0.01 pershare change for the 2016 first quarter.

SELECTED FINANCIAL DATA

The selected consolidated financial data presented below for 2011 through 2015 and as of the end of each suchyear, except for the statistical data, are derived from our audited consolidated financial statements and should beread in conjunction with those consolidated financial statements and the related notes.

Years Ended November 30,

2015 2014 2013 2012 2011

(dollars in millions, except per share, per ton and currency data)

Statements of Income DataRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,714 $15,884 $15,456 $15,382 $15,793Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,574 $ 1,772(a) $ 1,329(a) $ 1,629(b) $ 2,255(b)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,757 $ 1,216(a) $ 1,055(a) $ 1,285(b) $ 1,912(b)Earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.57(a) $ 1.36(a) $ 1.66(b) $ 2.43(b)Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56(a) $ 1.36(a) $ 1.65(b) $ 2.42(b)

Adjusted net income (c) . . . . . . . . . . . . . . . . . . . . . . $ 2,106 $ 1,504(a) $ 1,209(a) $ 1,501(b) $ 1,939(b)Adjusted earnings per share – diluted (c) . . . . . . . . $ 2.70 $ 1.93(a) $ 1.55(a) $ 1.92(b) $ 2.46(b)Dividends declared per share . . . . . . . . . . . . . . . . . . $ 1.10 $ 1.00 $ 1.00 $ 1.50(d) $ 1.00Statements of Cash Flow DataCash provided by operating activities . . . . . . . . . . . $ 4,545 $ 3,430 $ 2,834 $ 2,999 $ 3,766Cash used in investing activities . . . . . . . . . . . . . . . $ 2,478 $ 2,507 $ 2,056 $ 1,772(e) $ 2,646Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . $ 2,294 $ 2,583 $ 2,149 $ 2,332 $ 2,696Cash used in financing activities . . . . . . . . . . . . . . . $ 942 $ 1,028 $ 780 $ 1,190 $ 1,093Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 816 $ 776 $ 1,164 $ 779 $ 671

Statistical DataALBDs (in thousands) . . . . . . . . . . . . . . . . . . . . . . . 77,307 76,000 74,033 71,976 69,971Occupancy percentage . . . . . . . . . . . . . . . . . . . . . . . 104.8% 104.1% 105.1% 105.5% 106.2%Passengers carried (in thousands) . . . . . . . . . . . . . . 10,837 10,566 10,061 9,829 9,559Fuel consumption in metric tons (in thousands) . . . 3,181 3,194 3,266 3,354 3,395Fuel consumption in metric tons per ALBD . . . . . . 0.041 0.042 0.044 0.047 0.049Fuel cost per metric ton consumed . . . . . . . . . . . . . $ 393 $ 636 $ 676 $ 710 $ 646Currencies

U.S. dollar to Euro . . . . . . . . . . . . . . . . . . . . . . . . $ 1.12 $ 1.34 $ 1.32 $ 1.28 $ 1.40U.S. dollar to Sterling . . . . . . . . . . . . . . . . . . . . . $ 1.54 $ 1.66 $ 1.56 $ 1.58 $ 1.60U.S. dollar to Australian dollar . . . . . . . . . . . . . . $ 0.76 $ 0.91 $ 0.98 $ 1.03 $ 1.03U.S. dollar to Canadian dollar . . . . . . . . . . . . . . . $ 0.79 $ 0.91 $ 0.97 $ 1.00 $ 1.01

As of November 30,

2015 2014 2013 2012 2011

(dollars in millions)

Balance Sheet and Other DataTotal assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39,237 $39,448(a) $40,042(b) $39,126(b) $38,610(b)Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,787 $ 9,088 $ 9,560 $ 8,902 $ 9,353Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . $23,771 $24,204(a) $24,492(b) $23,889(b) $23,804(b)Total debt to capital (f) . . . . . . . . . . . . . . . . . . . . . . 27.0% 27.3%(b) 28.1%(b) 27.1%(b) 28.2%(b)

(a) Previously reported results have changed as a result of our revision of prior period financial statements (see“Note 1 – General – Revision of Prior Period Financial Statements” in the consolidated financial statementsand “Key Performance Non-GAAP Financial Indicators,” as applicable, for additional discussion).

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(b) Previously reported results changed as follows as a result of our revision of prior period financial statements(see “Note 1 – General – Revision of Prior Period Financial Statements” in the consolidated financialstatements for additional discussion):

Year EndedNovember 30, 2012

Year EndedNovember 30, 2011

AsPreviouslyReported

AsRevised

AsPreviouslyReported

AsRevised

Statements of Income DataOperating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,642 $1,629 $2,255 $2,255Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,298 $1,285 $1,912 $1,912Earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.67 $ 1.66 $ 2.43 $ 2.43Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.67 $ 1.65 $ 2.42 $ 2.42

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,514 $1,501 $1,939 $1,939Adjusted earnings per share – diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.94 $ 1.92 $ 2.46 $ 2.46

November 30, 2013 November 30, 2012 November 30, 2011

AsPreviouslyReported

AsRevised

AsPreviouslyReported

AsRevised

AsPreviouslyReported

AsRevised

Balance Sheet and Other DataTotal assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,104 $40,042 $39,161 $39,126 $38,637 $38,610Total shareholders’ equity . . . . . . . . . . . . . . . . . $24,556 $24,492 $23,929 $23,889 $23,832 $23,804Total debt to capital (1) . . . . . . . . . . . . . . . . . . . 28.0% 28.1% 27.1% 27.1% 28.2% 28.2%

(1) As a result of the revision, total debt to capital as of November 30, 2014 changed from 27.2%, aspreviously reported, to 27.3%.

(c) Adjusted net income and adjusted fully diluted earnings per share was computed as follows:

Years Ended November 30,

2015 2014 2013 2012 2011

Net incomeU.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,757 $1,216 $1,055 $1,285 $1,912Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 18 - - -(Gains) losses on ship sales and ship impairments, net (i) . . . . (8) 2 163 49(ii) 28(iii)Goodwill, trademark and other impairment charges (i) . . . . . . - - 27 173(iv) -Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . 332 268 (36) (6) (1)

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,106 $1,504 $1,209 $1,501 $1,939

Weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . 779 778 777 779 789

Earnings per shareU.S. GAAP earnings per share . . . . . . . . . . . . . . . . . . . . . . . $ 2.26 $ 1.56 $ 1.36 $ 1.65 $ 2.42Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03 0.02 - - -(Gains) losses on ship sales and ship impairments, net (i) . . . . (0.01) - 0.21 0.06(ii) 0.04(iii)Goodwill, trademark and other impairment charges (i) . . . . . . - - 0.03 0.22(iv) -Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . 0.42 0.35 (0.05) (0.01) -

Adjusted earnings per share (i) . . . . . . . . . . . . . . . . . . . . . . . $ 2.70 $ 1.93 $ 1.55 $ 1.92 $ 2.46

(i). See “Key Performance Non-GAAP Financial Indicators” for further discussion of the (gains) losses onship sales and ship impairments, net and goodwill, trademark and other impairment charges for theyears ended November 30, 2015, 2014, and 2013.

(ii). Represents impairment charges of $34 million for Costa Allegra and $23 million for two Seabournships, partially offset by an $8 million gain on the sale of Pacific Sun.

(iii). Represents impairment charges related to the sale of Costa Marina and Pacific Sun.

(iv). Represents impairment charges related to Ibero’s goodwill and trademarks.

(d) Includes a special dividend of $0.50 per share.

(e) Net of $508 million of insurance proceeds received for the total loss of a ship.

(f) Percentage of total debt to the sum of total debt and shareholders’ equity.

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MARKET PRICE FOR COMMON STOCK AND ORDINARY SHARES

Carnival Corporation’s common stock, together with paired trust shares of beneficial interest in the P&OPrincess Special Voting Trust, which holds a Special Voting Share of Carnival plc, is traded on the NYSE underthe symbol “CCL.” Carnival plc’s ordinary shares trade on the London Stock Exchange under the symbol“CCL.” Carnival plc’s American Depository Shares (“ADSs”), each one of which represents one Carnival plcordinary share, are traded on the NYSE under the symbol “CUK.” The depository for the ADSs is JPMorganChase Bank. The daily high and low stock sales price for the periods indicated on their primary exchange was asfollows:

CarnivalCorporation Carnival plc

PerShare

Per OrdinaryShare Per ADS

High Low High Low High Low

2015Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54.59 $47.42 £36.38 £32.33 $56.28 $49.23Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54.05 $44.72 £35.76 £29.74 $55.81 $47.08Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $49.21 $43.10 £33.81 £28.90 $50.10 $44.04First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $47.44 $41.86 £31.53 £26.74 $47.23 $42.03

2014Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44.44 $33.11 £28.25 £20.93 $44.24 $33.47Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40.65 $35.70 £24.86 £20.85 $41.75 $35.37Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40.41 $35.79 £25.10 £21.84 $41.03 $36.35First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41.89 $34.82 £26.15 £21.11 $42.77 $35.04

As of January 20, 2016, there were 3,397 holders of record of Carnival Corporation common stock and 34,397holders of record of Carnival plc ordinary shares and 109 holders of record of Carnival plc ADSs. The pastperformance of our share prices cannot be relied on as a guide to their future performance.

All dividends for both Carnival Corporation and Carnival plc are declared in U.S. dollars. If declared, holders ofCarnival Corporation common stock and Carnival plc ADSs receive a dividend payable in U.S. dollars. Thedividends payable for Carnival plc ordinary shares are payable in sterling, unless the shareholders elect to receivethe dividends in U.S. dollars. Dividends payable in sterling will be converted from U.S. dollars into sterling atthe U.S. dollar to sterling exchange rate quoted by the Bank of England in London at 12:00 p.m. on the nextcombined U.S. and UK business day that follows the quarter end.

The payment and amount of any future dividend is within the discretion of the Boards of Directors. Ourdividends were and will be based on a number of factors, including our earnings, liquidity position, financialcondition, tone of business, capital requirements, credit ratings and the availability and cost of obtaining newdebt. We cannot be certain that Carnival Corporation and Carnival plc will continue their dividend in the future,and if so, the amount and timing of such future dividends are not determinable and may be different than priordeclarations.

66

STOCK PERFORMANCE GRAPHS

Carnival Corporation

The following graph compares the Price Performance of $100 if invested in Carnival Corporation common stockwith the Price Performance of $100 if invested in each of the Dow Jones U.S. Recreational Services Index (the“Dow Jones Recreational Index”), the FTSE 100 Index, the Morningstar Leisure/Lodging/Resorts and CasinosBlended Index (the “Morningstar Leisure Index”) and the S&P 500 Index. The Price Performance, as used in thePerformance Graph, is calculated by assuming $100 is invested at the beginning of the period in CarnivalCorporation common stock at a price equal to the market value. At the end of each year, the total value of theinvestment is computed by taking the number of shares owned, assuming Carnival Corporation dividends arereinvested, multiplied by the market price of the shares.

Carnival Corporation Common Stock Dow Jones Recreational Index

S&P 500 Index

FTSE 100 Index Morningstar Leisure Index

5 -YEAR CUMULATIVE TOTAL RETURNS

DO

LL

AR

S

2010 2011 2012 2013 2014 2015$50

$100

$150

$200

Assumes $100 Invested on November 30, 2010Assumes Dividends Reinvested

Years Ended November 30,

2010 2011 2012 2013 2014 2015

Carnival Corporation Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 83 $ 99 $ 97 $121 $142Dow Jones Recreational Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 86 $110 $126 $168 $187FTSE 100 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $105 $119 $143 $142 $134Morningstar Leisure Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 94 $111 $164 $181 $175S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $108 $125 $163 $191 $196

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Carnival plc

The following graph compares the Price Performance of $100 invested in Carnival plc ADSs, each representingone ordinary share of Carnival plc, with the Price Performance of $100 invested in each of the indexes notedbelow. The Price Performance is calculated in the same manner as previously discussed.

Carnival plc ADS Dow Jones Recreational Index

S&P 500 Index

FTSE 100 Index Morningstar Leisure Index

5 -YEAR CUMULATIVE TOTAL RETURNS

DO

LL

AR

S

2010 2011 2012 2013 2014 2015$50

$100

$150

$200

Assumes $100 Invested on November 30, 2010Assumes Dividends Reinvested

Years Ended November 30,

2010 2011 2012 2013 2014 2015

Carnival plc ADS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 85 $104 $ 97 $120 $146Dow Jones Recreational Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 86 $110 $126 $168 $187FTSE 100 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $105 $119 $143 $142 $134Morningstar Leisure Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $ 94 $111 $164 $181 $175S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 $108 $125 $163 $191 $196

68

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Our revenues from the sale of passenger tickets are seasonal. Historically, demand for cruises has been greatestduring our third quarter, which includes the Northern Hemisphere summer months. This higher demand duringthe third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of ouroperating income is earned during this period. The seasonality of our results also increases due to ships beingtaken out-of-service for maintenance, which we schedule during non-peak demand periods. In addition,substantially all of Holland America Princess Alaska Tours’ revenue and net income is generated from Maythrough September in conjunction with the Alaska cruise season.

Quarterly financial results for 2015 were as follows (in millions, except per share data):

Quarters Ended

February 28 May 31 August 31 November 30

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,531 $3,590 $4,883 $3,711Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 266 $ 289 $1,510 $ 510Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49 $ 222 $1,216 $ 270Earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.06 $ 0.29 $ 1.56 $ 0.35Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.06 $ 0.29 $ 1.56 $ 0.35

Adjusted net income (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 159 $ 193 $1,365 $ 389Adjusted earnings per share—diluted (a) . . . . . . . . . . . . . . . . $ 0.20 $ 0.25 $ 1.75 $ 0.50Dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.25 $ 0.25 $ 0.30 $ 0.30

(a) Adjusted net income and adjusted fully diluted earnings per share were computed as follows:

Quarters Ended

February 28 May 31 August 31 November 30

Net incomeU.S. GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 49 $ 222 $1,216 $ 270Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . - 7 14 4Gain on ship sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (2) (2) (2)Unrealized losses (gains) on fuel derivatives, net . . . . . . 112 (34) 137 117

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 159 $ 193 $1,365 $ 389

Weighted-average shares outstanding . . . . . . . . . . . . . . . . . 779 780 781 777

Earnings per shareU.S. GAAP earnings per share . . . . . . . . . . . . . . . . . . . $ 0.06 $ 0.29 $ 1.56 $ 0.35Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . - 0.01 0.02 -Unrealized losses (gains) on fuel derivatives, net . . . . . . 0.14 (0.05) 0.17 0.15

Adjusted earnings per share . . . . . . . . . . . . . . . . . . . . . $ 0.20 $ 0.25 $ 1.75 $ 0.50

Quarterly financial results for 2014 were as follows (in millions, except per share data):

Quarters Ended

February 28 May 31 August 31 November 30

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,585 $3,633 $4,947 $3,718Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 67(a) $ 147(a) $1,292(a) $ 265(a)Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (20)(a) $ 98(a) $1,241(a) $ (104)(a)(Loss) earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.03)(a) $ 0.13(a) $ 1.60(a) $ (0.13)(a)Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.03)(a) $ 0.13(a) $ 1.60(a) $ (0.13)(a)

Adjusted net (loss) income (b) . . . . . . . . . . . . . . . . . . . . . . . . . $ (3)(a) $ 73(a) $1,226(a) $ 208(a)Adjusted earnings per share – diluted (b) . . . . . . . . . . . . . . . . . $ 0.00(a) $ 0.09(a) $ 1.58(a) $ 0.27(a)Dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.25 $ 0.25 $ 0.25 $ 0.25

(See next page for footnotes.)

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(a) Previously reported results changed as follows as a result of our revision of prior period financial statements(see “Note 1 – General – Revision of Prior Period Financial Statements” in the consolidated financialstatements for additional discussion):

Quarter EndedFebruary 28, 2014

Quarter EndedMay 31, 2014

As PreviouslyReported

AsRevised

As PreviouslyReported

AsRevised

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72 $ 67 $ 155 $ 147Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (15) $ (20) $ 106 $ 98(Loss) earnings per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.02) $(0.03) $0.14 $0.13Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.02) $(0.03) $0.14 $0.13

Adjusted net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ (3) $ 80 $ 73Adjusted earnings per share – diluted . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00 $0.10 $0.09

Quarter EndedAugust 31, 2014

Quarter EndedNovember 30, 2014

As PreviouslyReported

AsRevised

As PreviouslyReported

AsRevised

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,298 $1,292 $ 267 $ 265Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,247 $1,241 $ (102) $ (104)Earnings (loss) per share

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.61 $ 1.60 $(0.13) $(0.13)Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.60 $ 1.60 $(0.13) $(0.13)

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,232 $1,226 $ 210 $ 208Adjusted earnings per share – diluted . . . . . . . . . . . . . . . . . . . . . . . $ 1.58 $ 1.58 $ 0.27 $ 0.27

(b) Adjusted net (loss) income and adjusted fully diluted earnings per share were computed as follows:

Quarters Ended

February 28 May 31 August 31 November 30

Net incomeU.S. GAAP net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (20) $ 98 $1,241 $ (104)Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - 18(Gains) on ship sales and ship impairments, net . . . . . . . . . . . . . - (15) - 17Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . . . 17 (10) (15) 277

Adjusted net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3) $ 73 $1,226 $ 208

Weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . 776 778 778 776

Earnings per shareU.S. GAAP (loss) earnings per share . . . . . . . . . . . . . . . . . . . . $(0.03) $ 0.13 $ 1.60 $(0.13)Restructuring expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - 0.02(Gains) on ship sales and ship impairments, net . . . . . . . . . . . . . - (0.02) - 0.02Unrealized losses (gains) on fuel derivatives, net . . . . . . . . . . . . 0.02 (0.02) (0.02) 0.36

Adjusted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.09 $ 1.58 $ 0.27

70

CORPORATE AND OTHER INFORMATION

SENIOR OFFICERS

CARNIVAL CORPORATION & PLCMicky ArisonChairman of the Board

Arnold W. DonaldPresident and Chief Executive Officer

David BernsteinChief Financial Officer

Alan B. BuckelewChief Operations Officer

Arnaldo PerezGeneral Counsel and Secretary

CARNIVAL UKDavid DingleChairman

COSTA GROUPMichael ThammChief Executive Officer

HOLLAND AMERICA GROUPStein KruseChief Executive Officer

BOARD OF DIRECTORS

Micky Arison 3

Chairman of the BoardCarnival Corporation & plc

Sir Jonathon Band 4

Former First Sea Lord andChief of Naval StaffBritish Navy

Arnold W. Donald 3

President and Chief Executive OfficerCarnival Corporation & plc

Richard J. Glasier 1, 2, 5

Former President and Chief Executive OfficerArgosy Gaming Company

Debra Kelly-Ennis 4

Former President and Chief Executive OfficerDiageo Canada, Inc.

Sir John Parker 4, 5

Chairman of Anglo American plc

Stuart Subotnick 1, 3, 5

President and Chief Executive OfficerMetromedia Company

Laura Weil 1, 2

Former Executive Vice President andChief Operating OfficerNew York & Company, Inc.

Randall J. Weisenburger 1, 2, 5

Managing MemberMile26 Capital LLC1 Audit Committee2 Compensation Committee3 Executive Committee4 Health, Environmental, Safety & Security

Committee5 Nominating & Governance Committee

DIRECTORS EMERITUS AND LIFEPRESIDENTS

Ted Arison (1924-1999)Chairman Emeritus, Carnival Corporation

Maks Birnbach (1920-2007)Director Emeritus, Carnival Corporation

A. Kirk LantermanChairman EmeritusHolland America Line Inc.

Meshulam Zonis (1933-2009)Director Emeritus, Carnival Corporation

Uzi ZuckerDirector Emeritus, Carnival Corporation & plc

Horst RaheLife President of AIDA Cruises

The Lord Sterling ofPlaistow GCVO, CBELife President of P&O Cruises

OTHER INFORMATION

Corporate HeadquartersCarnival CorporationCarnival Place3655 N.W. 87th AvenueMiami, Florida 33178-2428 U.S.A.305-599-2600

Registered OfficeCarnival plcCarnival House100 Harbour ParadeSouthampton S015 1ST UK44 (0) 23 8065 5000

Independent RegisteredCertified Public Accounting FirmPricewaterhouseCoopers LLP333 SE Second Avenue, Suite 3000Miami, Florida 33131-2330 U.S.A.

Registrars, Stock Transfer Agents andDividend Reinvestment PlanAdministratorsCarnival CorporationComputershare Investor ServicesP.O. Box 30170College Station, Texas 77842-3170 U.S.A.800-568-3476 (U.S.A, U.S.A Territories andCanada)781-575-2879 (Outside U.S.A, U.S.A Territoriesand Canada)

Carnival plcEquiniti LimitedAspect House, Spencer RoadLancing, West Sussex BN99 6DA UK0371 384 2665 (UK)44 121 415 7107 (Outside UK)

Legal CounselGibson, Dunn & Crutcher LLP1050 Connecticut Avenue, N.W.Washington D.C. 20036-5306 U.S.A.

Other Shareholder InformationCopies of our joint Annual Report onForm 10-K, joint Quarterly Reportson Form 10-Q, joint Current Reports onForm 8-K, Carnival plc Annual Accounts and allamendments to those reports, press releases andother documents, as well as information on ourcruise brands are available through our website atwww.carnivalcorp.com or www.carnivalplc.com.

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Carnival House 100 Harbour Parade, Southampton SO15 1st, United Kingdom www.carnivalplc.com